TMI Blog2021 (11) TMI 735X X X X Extracts X X X X X X X X Extracts X X X X ..... o carry on business through the instrumentality of a company is a right guaranteed under article 19(1)(g) of Constitution of India, and it cannot be taken away by this hon'ble Tribunal acting under the Companies Act, 2013 on mere conjectures and allegations without finding of a competent court of law, is mere misconception of law - rights of shareholders can be exercised through board of directors elected by them. Every shareholder cannot claim and defend the cases filed against their company, whether it is winding up petition or other cases and, it is the responsibility of company represented by its board of directors, to defend those cases, as a legal entity. It is misconception of law that every shareholders/stakeholders are to be heard in every case filed against a company. 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment. Since inception, respondent No. 2 invested time, resources and funds (as also by inter alia raising capital from its shareholders) in carrying out acts in furtherance of its obligations under the Devas agreement. Respondent No. 2 had therefore commenced arbitration to pursue its legal remedies. (3) It was the invocation of arbitration, which respondent No. 2 had commenced to pursue its legal remedies that led to a series of actions on the part of state machinery to arm-twist Devas to give up its claim in the arbitration proceedings and fruits of the Award. One such action is the pre sent winding up petition filed by respondent No. 1 before this hon'ble Tribunal under section 271(c) of the Companies Act, 2013 alleging that the entire genesis and object of respondent No. 2 including the actions taken by respondent No. 2 shows that the company had no real substratum except as a conduit for committing illegal actions, etc. Since serious allegations have been made against shareholders of respondent No. 2 it is proper and necessary that the applicant, being a shareholder of respondent No. 2 be heard by this hon'ble Tribunal before passing any orders in the aforesaid wind ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce respondent No. 1 has lost the ICC arbitration award for a sum of USD 562.5 million with simple interest at 18 per cent. from date of award to the date of payment, it has resorted to tactics which does not behove a state enterprise. Though respondent No. 1 herein has filed objections in the Delhi High Court in O. M. P. No. 11 of 2021 and is resisting execution outside India in various proceedings, it has thought of this novel way to circumvent decision on objections in O. M. P. No. 11 of 2021 pending in the Delhi High Court and in various courts outside India by filing the present petition. The allegation that the award has been obtained fraudulently is also pending before the Delhi High Court in O. M. P. No. 11 of 2021 and, therefore, no conclusion that the award was obtained fraudulently can be made by this hon'ble Tribunal. (7) If the hon'ble Tribunal allows debtor (respondent No. 1) to file a winding up petition against the creditor, i. e., respondent No. 2, the entire law of winding up would turn on its head. The applicant is directly and vitally affected by the orders passed in the present proceedings as it affects the applicant's right to participate in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le Tribunal vide its order passed on January 19, 2021 (Antrix Corporation Ltd. v. Devas Multimedia P. Ltd. [2021] 224 Comp Cas 573 (NCLT)) appointed the official liquidator attached to the hon'ble High Court of Karnataka, as the provisional liquidator, to take over the affairs of the respondent. The order dated January 19, 2021 was appealed against in the hon'ble National Company Law Appellate Tribunal, Chennai by the impleading applicant in the capacity of a shareholder in the respondent and vide order dated February 11, 2021 (Devas Employees Mauritius P. Ltd. v. Antrix Corporation Ltd. [2021] 225 Comp Cas 305 (NCLAT)) the hon'ble National Company Law Appellate Tribunal permit ted the impleading applicant to file an application before this hon'ble Tribunal with a direction to consider it in accordance with law. (2) In light of the order of the hon'ble National Company Law Appellate Tribunal, the impleading applicant has moved the application for impleadment. However, when the matter was listed on March 2, 2021 this hon'ble Tribunal was gracious enough to permit the respondent directly to place on record its objections to the company petition filed by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntiments. Respondent No. 1-company and the impleading shareholder have not done anything wrong and have nothing to hide. The question is of winding up a company, of its civil death. Hence, this hon'ble Tribunal is duty bound to examine every aspect in depth, before imposing, as it were, the death penalty on respondent No. 1-company. (3) Further, every investment came into the country with prior FIPB approval. As per clause 5 of the FIPB approval dated May 18, 2006 the pricing/valuation was required to be as per RBI/SEBI Guidelines and admittedly, there is no allegation that any pricing guidelines have been violated. The provisions of section 271(c) of the Companies Act, 2013 which have been invoked for filing the present petition does not take within its ambit the question whether there is any asset of the company, or whether there is any business of the company to justify the same remaining on the rolls of the Registrar of Companies. As demonstrated, respondent No. 1-company has assets in form of deposit with Enforcement Directorate-₹ 79 crores, and Income-tax paid under protest-₹ 13 crores. Further, the most valuable asset is the ICC Award dated September 14, 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... companies like Satyam and IL and FS, where huge fraud has been detected which touched the general public, these companies were not wound up. Instead, the management was taken over under the Companies Act and/or the provisions of the IBC. (7) It is significant to note that the allegations made by the petitioner are unsubstantiated. Even though documents in various criminal proceedings including charge sheets by CBI, PMLA proceedings, Registrar of Companies investigation, etc., have been referred to by the petitioner in its winding up petition, these documents do not establish any fraud by either respondent No. 1-company and/or its officers and/or its shareholders. Mere filing of cases by the Government cannot establish any fraud by either respondent No. 1-company and/or its shareholders. The allegations made in the criminal proceedings have to be proved beyond reasonable doubt and a judgment has to be delivered by a competent court of law before a person can be said to be guilty of any fraud , cheating or any such criminal and/or civil offence. (8) Though Antrix/petitioner herein has filed objections before the hon'ble High Court of Delhi in O. M. P. (Comm) No. 11 o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ectors, it has no locus standi to file any application to implead in winding up petition filed against Devas to support it. Therefore, filing of the instant application itself is misconceived in facts and law, and thus it is liable to be dismissed on this ground alone. 8. As rightly pointed out by Shri N. Venkataraman, the learned ASG, when Devas is defending its interest which include the interest of its share- holders by filing its counter and engaging its legal counsel, it cannot be permitted to be impleaded. And it is not necessary and proper party to the company petition to be impleaded. The applicant is bound by the decisions taken by its main company, wherein it is holding shares. As long as it has no grievances against the affairs of Devas company, the applicant has no locus standi to intervene in the main company petition. The contention of applicant that amount awarded is an asset and Antrix is debtor is not tenable and it is baseless, as long as the award has not attained its finality, through judicial process. Admittedly, the validity of Award is in question and the same is sub judice. 9. The contention that rights of shareholders to carry on business through the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... failed to make out even prima facie case to entertain the instant application and rights of applicant as minority shareholders are not in jeopardy, as alleged, various citations would not support the case of the applicant. 12. We have carefully perused various judgments cited by the applicant in its support and found that facts and circumstances as available in those cases, would not applicable to the facts of instant case. To cite few, in the case of Rajneesh Khajuria v. Wockhardt Ltd., the issue in the first instance arise out of termination of service. Similarly, the judgment rendered in ZTE Corporation v. Siddarth Garg would not applicable to the present case. Likewise, the judgment in the case of Rohit Manjrekar M. S. Earth Events (India) P. Ltd. v. Registrar of Companies, Karnataka. Since the applicant is held to be no locus standi to file the instant application, judgments would be of no assistance to it. 13. For the aforesaid reasons and circumstances of the case and the law on the issue and for the reasons given in the judgment dated May 25, 2021 passed in C. P. No. 06/BB/2021 we are of the considered view that instant application is misconceived in law and facts and ..... 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