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1 ALL INDIA CORPORATE LAW MOOT COURT COMPETITION

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BEFORE THE HONBLE HIGH COURT OF DELHI W.P. No. 2001/2009

A Writ Petition filed to the Honble High Court under Article 226 of Constitution of India BETWEEN:
Mr. SRINIVAS SHETTY & ORS. Vs. NABELUNG COMPANY LIMITED THELODONIUS PLASMA LIMITED ... RESPONDENT NO.1 ... RESPONDENT NO. 2 PETITIONER

SECURITIES AND EXCHANGE BOARD OF INDIA (SEBI)....RESPONDENT NO.3 MR. ARJUN SINGHANIA NO.4 PURANTEE OCSIPEP INDIA PRIVATE LIMITED NO. 5 ........RESPONDENT ...RESPONDENT

__________________________________ MEMORANDUM FOR PETITIONER _____________________________________

PLACE: NEW DELHI COUNSEL FOR PETITIONER DATE : 8th November, 2009

Table of Contents TABLE OF CONTENTS LIST OF ABBREVIATIONS..........................................................................................................ii INDEX OF AUTHORITIES...........................................................................................................iii

Statutes...................................................................................................iii Cases Referred.......................................................................................iii Books Referred......................................................................................iv Dictionaries Referred.............................................................................v Electonic sources....................................................................................v

STATEMENT OF JURISDICTION................................................................................................vi STATEMENT OF FACTS............................................................................................................vii ISSUES RAISED..........................................................................................................................ix SUMMARY OF ARGUMENTS.......................................................................................................x ARGUMENTS ADVANCED...........................................................................................................1 ISSUE 1: THE PRACTICES ESPOUSED BY THE MAJORITY SHAREHOLDERS TOWARDS THE MINORITY SHAREHOLDERS WERE MALFEASANCE IN NATURE................................................................................................1 ISSUE 2: THE SECURITY AND EXCHANGE BOARD OF INDIA (SEBI) HAS PERFORMED ITS FUNCTIONS AS ENVISAGED IN THE ACT........................8 ISSUE 3: THE FRAUDULENT CONDUCT OF Mr.SINGHANIA HAS RESULTED IN DOWNFALL OF STOCK PRICES OF AHL............................10 ISSUE 4: POPIL HAD BEEN NEGLIGENT IN ITS CAPACITY AS THE STATUTORY AUDITORS OF AHL.................................................................................14

MEMORANDUM FOR PETITIONER

Table of Contents

PRAYER.................................................................................................................................. ..17

MEMORANDUM FOR PETITIONER

ii

List of Abbreviations

LIST OF ABBREVIATIONS
SL NO. 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. ABBREVIATION AIR Art. Bom Cal Co. Com CLB CrLJ Honble HC L.J Pvt. SC SAT SCC FULL FORM All India Reports Article Bombay Calcutta Company Company Case Laws Company Law Board Criminal Law Journal Honourable High Court Law Journal Paragraph Private Supreme Court Security Appellate Tribunal Supreme Court Cases

MEMORANDUM FOR PETITIONER

iii

Index of Authorities INDEX OF AUTHORITIES STATUTES:

1. 2.

Constitution Of India, 1950 Security Contracts (Regulations) Act, 1956. Security Contracts (Regulations) Act, 1957 Substantial Acquisition and Shares Takeover Regulations, 1997 The Companies Act, 1956. The Security and Exchange Board of India, 1992

3. 4.
5.

6.

CASES REREFFED: INDIAN CASES

1. A.M. Varkey v. J.R. Motishaw, AIR 1964 Ker 114 2. Babu Ram v. State of U.P (1995) 2 SCC 689 (para 16 and 18) 3. CIT v. G.M. Dandekar, (1952) 22 Com Cases 356, 359 (Mad) 4. Controller of Insurance v. H.C Das, AIR 1957 Cal 387 5. Dale & Carrington P. Ltd. v. P.K. Prathapan 122 Comp Cas 161 (SC) 6. Deputy Secretary to the Government of India, Ministry of Finance v. S. N.

Das Gupta, (1995) 25 Com cases 413: AIR 1955 Cal 414
7. Dr. Jayaram Chigurupati v. SEBI & others,(2009)Appeal No. 137 (SAT), 8. Institute of Chartered Accountants v. Rajaram , (1960) 30 Com Cases 67

(Mad)
9. Institute of chartered accountants v. P.K. Mukherjee, (1968) 38 Com Cases

628
10. Integrated Amusement Ltd v. SEBI 2000(27) SCL 458 11. Jibrial Diwan v. State of Maharashtra, 1997 CrLJ 4070, AIR 1997 SC 3424 12. K.R.S. Narayana Iyengar v. T.A. Mani, AIR 1960 Mad 338 13. M Z Khan v. SEBI (1999)19 SCL 253, 34 CLA 445, AIR 1999 Del 164. 14. Needle Industries(India) Ltd v. Needle Industries Newey(India) Holding Ltd;

(1981) 51 Com Cases 743, AIR 1981 SC 1298.

MEMORANDUM FOR PETITIONER iv

Index of Authorities
15. Ramana Dayaram Shetty v. IAAI., AIR 1979 SC 1628 16. Ramrakh R Bohra v. SEBI (1998) 18 SCL 543 17. Ramsharan Autyanuprasi v. Union of India, AIR 1989 SC 549

18. Suman v. State of J&K, AIR 1983 SC 1235 (para 6) 19. S. Mani v. Chairman v. Managing Director Syndicate Bank and ors AIR

1968 SC 1104;
20. State Bank of India v. Bela Bagchi, 2005 (7) SCC 435 21. State of Punjab v. Gurdial Singh, AIR 1980 SC 319 (paras 8-9) 22. Triumph International Finance v. SEBI (2001)33 SCL 363(SAT)

INTERNATIONAL CASES
1. Bath v. Standard Land Co. (1910) 2 Ch., 408 2. Berg Sons & Co. Ltd. v. Mervyn Hampton Adains, 1993 BCLC 1045 (QBD). 3. City Equitable Fire Insurance Co. Ltd v. Mr.B(1925) Ch 407, 495 (1924) All ER
Rep 485 (CA),

4. Elder v. Elder & Watson. Ltd., (1952) Scottish Cases 49. 5. Frankston and Hastings Corpn. V. Cohen, (1960) 102 CLR 607

(Commonwealth Law Reports) at 617

6. H.R. Harmer Ltd., (1958) 3 All ER 689: (1959) 29 Com Cases 305 7. Jermyn Street Turkish Baths Ltd., In Re, (1971) 3 All ER 184 8. Scottish Co-operative Wholesale Society Ltd. v. Meyer, (1958) 3 All ER 66 :

(1959) 29 Com Cases 1

BOOKS REFERRED:
1. A. Ramaiah, Guide to Companies Act, Wadhwa & Co Nagpur, 14th ed. 2. Avtar Singh, Company Law, Eastern Book Company, 14th ed. 3. Durga Das Basu, Introduction to the Constitution of India, Wadhwa &

Co Nagpur 19th ed.

4. Durga Das Basu, Shorter Constitution of India, Wadhwa & Co Nagpur,

13th ed.
MEMORANDUM FOR PETITIONER v

Index of Authorities
5. N.D Kapoor, Elements of Mercantile Law, Sultan Chand & sons, 25th ed. 6. Prabhas C. Sarkar, Criminal Major Acts. 7. Ratanlal & Dhirajlal, The India Penal Code, Wadhwa & Co Nagpur 31st

ed
8. V.S.Datey, Students Guide to Corporate Laws, Taxmann 5th ed.

DICTIONARY REFERRED:
1. Pramanatha Aiyar.P., Concise Law Dictionary, 3rd ed. (Wadhwa Nagpur 2008) 2. Pramanatha Aiyar.P., The Law Lexicon,2nd ed.( Wadhwa Nagpur)

ELECTRONICS SOURCES: 1. 2. 3. 4. 5. 6. 7. http://www.businessdictionary.com/ http://www.indiankanoon.com/ http://judis.openarchive.in/ http://www.sebi.gov.in/ http://Supremecourtonline.com/ http://www.takeovercode.com/ http://www.vakilno1.com/

MEMORANDUM FOR PETITIONER

vi

Statement of Jurisdiction

STATEMENT OF JURISDICTION The Petitioner had filed a writ petition before this Honble Court under Article 226 of the Constitution of India. It is most respectfully submitted that the jurisdiction of this Honble High Court to hear this matter is not under dispute.

MEMORANDUM FOR PETITIONER

vii

Statement of Facts STATEMENT OF FACTS 1. Nabelung Company Limited (hereinafter Nabelung), is a public listed corporation in South Africa, having its registered office at Pretoria, and engaged in the business of manufacture and sale of electronic products on a global scale. Thelodonius Plasma Limited (TPL) is an Indian public limited company, listed on the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE), having its registered office in Mumbai, and engaged in the same business as Nabelung. Alyona Health Limited (AHL) is another Indian public limited company listed on BSE, having its registered office in New Delhi and engaged in similar business as that of Nabelung and TPL. 2. Mr. Arjun Singhania, the Managing Director of AHL, and has a iconic

status in corporate world. Purantee Ocsipep India Private Limited (POPIL) has acted as statutory auditors of AHL since the inception of AHL and is the wholly owned subsidiary of Purantee Ocsipep Corporation (POP) TPL-AHL OFFER 3. TPL acquired 45% of the equity share capital in AHL, by way of purchase of part of the promoters stake in AHL and the remaining as preferential allotment of equity shares. On October 20, 2008, TPL made a public announcement to purchase additional shares in AHL from its public shareholders, at a price of Rs.200 per share. Subsequently, the open offer was conducted and the settlement of share took place on December 30, 2008, raising the stake of TPL in AHL to 48%. Nabelung-TPL OFFER 4. On January 15, 2009, Nabelung had entered into a Share Purchase Agreement (the SPA) with the promoters of TPL to acquire their entire holding of 35% in the issued, subscribed and fully paid-up equity capital of TPL. In addition, Nabelung entered into a Share Subscription Agreement with TPL in respect of such number of equity (by way of preferential allotment), and such number of warrants (each warrant exercisable for one equity share of TPL) at a price of Rs.500/- per share/ warrant, which would represent 10% of the fully paid-up
MEMORANDUM FOR PETITIONER viii

Statement of Facts equity capital of TPL. Pursuant to the execution of the definitive agreements as above, the acquirer made a public offer on January 20, 2009to the remaining shareholders of TPL to acquire shares representing in aggregate up to 23% of the issued, subscribed and fully paid-up equity capital of TPL (the TPL Offer). The TPL Offer was completed on March 20, 2009, and the acquirer held 68% of the equity share capital in TPL as a result of the above. Nabelung-AHL OFFER 5. On May 15, 2009, Nabelung made a public announcement to the shareholders of AHL, in respect of conducting a public open offer (the AHL Offer) to acquire shares representing up to 20% of the paid-up equity share capital of AHL at a price of Rs.155/- per share (the Offer Price) from the public shareholders of AHL. The public announcement stated that while there were no persons acting in concert within the meaning of the SAST Regulations in connection with the AHL Offer, nevertheless, certain entities could be deemed to be persons acting in the concert with the acquirer. Further, it was stated therein that the average of the weekly high and low of the closing prices of shares of AHL on BSE during the 26 weeks period preceding the date of public announcement was Rs.152/-, while the average of the daily high and low prices of the shares of AHL on BSE during the two weeks period preceding the date of public announcement was Rs.155/-. It was further noted therein that the scrip value of AHL had plummeted drastically in the recent past, to some of its lowest prices. 6. Delving closely into the matter, Mr. Shetty came to know that Mr. Singhania had, in the course of his work, operated via several benami accounts. It also surfaced that large sums of money were missing as a consequence of the falsification, and such amounts were plausibly misappropriated via the benami accounts. The AHL Boards internal investigation surrounding the situation led to a conclusion that the activities of Mr. Singhania would have significantly contributed towards the downward spiral of stock prices of the company. 7. Mr. Srinivas Shetty dispatched a communication to the SEBI on June 1, 2009, raising issues with the offer price of Rs.155/-. Not having heard from SEBI, Mr.
MEMORANDUM FOR PETITIONER ix

Statement of Facts Shetty has now filed a writ petition before the High Court of Delhi, alleging oppressive practices being adopted by majority shareholders against the interests of the minority

MEMORANDUM FOR PETITIONER

Issues raised ISSUES RAISED

I.

THE PRACTICES ESPOUSED BY THE MAJORITY SHAREHOLDERS TOWARDS SHAREHOLDERS WERE MALFEASANCE IN NATURE. 1

THE

MINORITY

THE TIMING OF AHL OFFER WAS NOT IN COMPLIANCE WITH SAST REGULATION.

OFFER PRICE OFFERED DURING THE AHL OFFER WAS NOT COMPLIANCE WITH SAST REGULATIONS.

IN

3 4

THE ACTIONS OF MAJORITY SHARE HOLDERS ARE OPPRESSIVE IN NATURE. FUNDAMENTAL RIGHTS HAVE BEEN VIOLATED.

II.

THE SECURITY AND EXCHANGE BOARD OF INDIA (SEBI) HAS NOT PERFORMED ITS FUNCTIONS AS ENVISAGED IN THE ACT. THE FRAUDULENT CONDUCT OF MR.SINGHANIA HAS RESULTED IN DOWNFALL OF STOCK PRICES OF AHL. 1 MR.SINGHANIA HAS VIOLATED HIS FIDUCIARY DUTIES. 2 MR.SINGHANIA IS LIABLE FOR PUNISHMENTS UNDER THE PENAL CODE OF INDIA

III.

IV.

POPIL HAD BEEN NEGLIGENT IN ITS CAPACITY AS THE STATUTORY AUDITORS OF AHL.

MEMORANDUM FOR PETITIONER

xi

Summary of Arguments SUMMARY OF ARGUMENTS Issue 1: THE PRACTICES ESPOUSED BY THE MAJORITY SHAREHOLDERS TOWARDS THE MINORITY SHAREHOLDERS WERE MALFEASANCE IN NATURE. The practices espoused by the majority shareholders towards the minority shareholders in the matter of timing the offer and pricing the share value at a very less price of AHL not in compliance with SAST Regulations were malfeasance in nature Issue 2: THE SECURITY AND EXCHANGE BOARD OF INDIA (SEBI) HAS NOT PERFORMED ITS FUNCTIONS AS ENVISAGED IN THE ACT. The Security and Exchange Board of India had to reply to the communication/letter dispatched to them on June 1, 2009 raising issues with the offer price of Rs.155 offered to AHL shareholders, as mentioned in the Act, which they have not done. Issue 3: THE FRAUDULENT CONDUCT OF MR.SINGHANIA HAS RESULTED IN DOWNFALL OF STOCK PRICES OF AHL. Mr. Singhania is the Managing Director of AHL, has committed fraud by manipulating the accounts of the company and operating benami accounts thereby, violating his fiduciary duties and applicable law which has paved way for disastrous consequences, least conducive to the interest of AHL.

Issue 4:

POPIL HAD BEEN NEGLIGENT IN ITS CAPACITY AS THE STATUTORY AUDITORS OF AHL. POPIL as Statutory Auditor appointed by AGM had to give a true and fair view of the Accounts of the Company by not being negligent / irresponsible, but in present case Statutory Auditors have been negligent resulting to falsification of Accounts over several years.

MEMORANDUM FOR PETITIONER

xii

Issue 1 ARGUMENTS ADVANCED I.

Arguments Advanced

THE PRACTICES ESPOUSED BY THE MAJORITY SHAREHOLDERS TOWARDS THE MINORITY SHAREHOLDERS WERE MALFEASANCE IN NATURE.

1.0.1 It is most humbly submitted before this Honble Court that the practices

espoused by the majority shareholders1 towards the minority shareholders2 were malfeasance3 in nature i.e. by not correctly timing the offer and pricing the share value at a very less price which are not in compliance with Substantial Acquisition of Shares and Takeovers Regulations, 19974.

1.1

THE TIMING OF AHL OFFER WAS NOT IN COMPLIANCE WITH SAST REGULATION.

I.1.1 It is submitted to this Honble Court that the timing of the AHL offer was not in compliance with SAST Regulations. TPL5 had acquired a total of 48% of shares as a result of Allotment and Acquisition on December 30, 2008 from AHL. 6 Further Nabelung 7acquired 68% of shares as a result of the Allotment and Acquisition on March 20, 2009 from TPL. Pursuant to the transaction TPL became a subsidiary to Nabelung and hence became Person Acting in Concert (PAC) in the subsequent transaction of Nabelung.

Hereinafter referred to Respondent No. 1 and Respondent No. 2 in pursuance to the definitive agreements and transactions between them. 2 Hereinafter referred to to all the shareholders of the Petitioners Company 3 Evil doing; ill conduct; the doing of what one ought not to do; the commission of some act which is positively unlawful; the doing of an act which is wholly wrongful; the unjust performance of some act which the party had no right to do, or which he had contracted not to do, Pramanatha Aiyar, Concise Law Dictionary, 3rd ed. (Wadhwa Nagpur 2008) 4 Hereinafter referred to as SAST Regulations. 5 Hereinafter called the Respondent No. 2 6 8, Statement of Facts 7 Hereinafter called the Respondent No. 1

MEMORANDUM FOR PETITIONER

Issue 1

Arguments Advanced

I.1.2 Pursuant to the definitive Agreements executed between Respondent No.1 and Respondent No.2 as mentioned supra, there was a change in promoters involving a change in the control8. I.1.3 Respondent No. 1 made a public announcement9 to the shareholders of AHL, in respect of conducting an open offer of the shares i.e. AHL OFFER. The Petitioner contends that the above said offer was not in compliance with the SAST Regulation. I.1.4 Pursuant to the Agreement, Respondent No.1 held 48% of the shares in the Petitioners company and it is an obligation of the Acquirer10 to make an open offer whether the shares acquired directly or indirectly under the Reg. 1011 and Reg..1112 of the code to the shareholders of the target company13 to acquire shares in the target company14.

Regulation 2(1)(c) of SAST Regulation, 1997 states that control shall include the right to appoint majority of the directors or to control the management or policy decisions exercisable by a person or persons acting individually or in concert, directly or indirectly, including by virtue of their shareholding or management rights or shareholders agreements or voting agreements or in any other manner. 9 Regulation 15 of SAST Regulation, 1997 states about Public announcement of offer. 10 Regulation 2(1)(b) of SAST Regulation, 1997 states that acquirer means any person who, directly or indirectly, acquires or agrees to acquire shares or voting rights in the target company, or acquires or agrees to acquire control over the target company, either by himself or with any person acting in concert with the acquirer 11 Regulation 10 of SAST Regulation, 1997 states that No acquirer shall acquire shares or voting rights which (taken together with shares or voting rights, if any, held by him or by persons acting in concert with him), entitle such acquirer to exercise 1[fifteen] per cent or more of the voting rights in a company, unless such acquirer makes a public announcement to acquire shares of such company in accordance with the regulations. 12 Regulation 11 of SAST Regulation, 1997 states that Consolidation of holdings. 13 Regulation 2(1)(o) of SAST Regulation, 1997 states that target company means a listed company whose shares or voting rights or control is directly or indirectly acquired or is being acquired. 14 Dr. Jayaram Chigurupati v. SEBI & others, SAT, Appeal No. 137

MEMORANDUM FOR PETITIONER

Issue 1

Arguments Advanced I.1.5 Further, the open offer had to be made within four working days through a merchant banker15 as per the provision of Reg. 14(1)16 of the regulation to the shareholders of the target company. I.1.6 The Acquirer without abiding by the said provision made a public announcement on May 15, 2009 for acquiring 20% 17which is more than the specified time limit i.e. the time taken is three months. Hence in view of the above, it is said that the timing of the AHL offer was not in compliance with the SAST Regulation, 1997.

I.2

OFFER PRICE OFFERED DURING THE AHL OFFER WAS NOT COMPLIANCE WITH SAST REGULATIONS.

IN

I.2.1 The offer price made by Respondent No. 1 to the shareholders of the Petitioners Company during AHL OFFER was inadequate.

15

Regulation 13 of SAST Regulation, 1997 states that Before making any public announcement of offer referred to in regulation 10 or regulation 11 or regulation 12, the acquirer shall appoint a merchant banker in Category I holding a certificate of registration granted by the Board, who is not an associate of or group of the acquirer or the target company. 16 Regulation 14(1) of SAST Regulation.1997 states that The public announcement referred to in regulation 10 or regulation 11 shall be made by the merchant banker not later than four working days of entering into an agreement for acquisition of shares or voting rights or deciding to acquire shares or voting rights exceeding the respective percentage specified therein: Provided that in case of disinvestment of a Public Sector Undertaking, the public announcement shall be made by the merchant banker not later than 4 working days of the acquirer executing the Share Purchase Agreement or Shareholders Agreement with the Central Government 2[or the State Government as the case may be, for the acquisition of shares or voting rights exceeding the percentage of shareholding referred to in regulation 10 or regulation 11 or the transfer of control over a target Public Sector Undertaking. 17 Regulation 21(1) of SAST Regulation, 1997 states that The public offer made by the acquirer to the shareholders of the target company shall be for a minimum twenty per cent of the voting capital of the company.

MEMORANDUM FOR PETITIONER

Issue 1

Arguments Advanced

I.2.2 Subsequent of acquisition of TPL by Nabelung on March 20, 2009, TPL became its Subsidiary of Nabelung18. Hence it indirectly acquired the target company, i.e. 48% of AHL. I.2.3 A resolution prejudicing the interests of the company19 or its shareholders amounts to oppression.20 In the instant case Respondent No. 1 has acquired the shares of AHL at a very low price violating all the norms of the takeover regulation. I.2.4 In pursuance to above, a Public Announcement calling for purchase of shares was made to the shareholders of AHL at a price of Rs.155 per share as offer price21 and the same was justified by the Respondent No. 1 as the highest price as per Reg. 20(4)(c)22 along with Reg. 20(12)23 of the SAST Regulation. The same is contended by the Petitioner. I.2.5 In the instant case the offer price had to be worked out between January 20th, 2009 i.e. date of public announcement made to TPL shareholders and May 15, 2009 i.e. date of public announcement made to AHL shareholders by Nabelung. I.2.6 Further while working the price of the shares Nabelung had to work as per Reg. 20(4) (b)24, i.e. whether any person acting in concert with them had paid any
18 19

4, Statement of Facts In the instant case AHL 20 A.M. Varkey v. J.R. Motishaw, AIR 1964 Ker 114 21 Regulation 20 of SAST Regulation, 1997 states that The offer to acquire shares under regulation 10, 11 or 12 shall be made at a price not lower than the price determined as per sub-regulations (4) and (5). 22 Regulation 20(4)(c) of SAST Regulation, 1997 states that The average of the weekly high and low of the closing prices of the shares of the target company as quoted on the stock exchange where the shares of the company are most frequently traded during the twenty-six weeks or the average of the daily high and low of the prices of the shares as quoted on the stock exchange where the shares of the company are most frequently traded during the two weeks preceding the date of public announcement, whichever is higher. 23 Regulation 20(12) of SAST Regulation, 1997 states that The offer price for indirect acquisition or control shall be determined with reference to the date of the public announcement for the parent company and the date of the public announcement for acquisition of shares of the target company, whichever is higher, in accordance with sub-regulation (4) or sub-regulation (5). 24 Regulation 20(4)(b) of SAST Regulation, 1997 states that Price paid by the acquirer or persons acting in

MEMORANDUM FOR PETITIONER

Issue 1

Arguments Advanced price for acquisition of shares in the target company prior to twenty six period of January 20th, 2009.

I.2.7 Also while determining the price for indirect acquisition, as per Regulation 20 requires the acquirer (Nabelung) to find whether it or any Person Acting in Concert has paid any price to the target company prior to January 20th, 2009. I.2.8 In the instant case, it is very clear from AHL-TPL deal that TPL had paid Rs. 200/share during the open offer of AHL shares dated October 20, 2008 which very much comes in twenty six period prior to January 20th, 2009. I.2.9 Now, as per Reg. 20(4)(c) the acquirer has to pay the highest amount to the shareholders as it is one of the main aim of the this takeover code i.e. while giving an exit option to the shareholders of the target company, they have to be offered the highest price. I.2.10 Since TPL is the Person Acting in Concert(PAC) as per Reg. 2(1)(e)(2)(i) which is understood from supra and had paid Rs. 200 for the Shares of the AHL, the same must be surmised and offered by Nabelung to the shareholders of AHL as the price is the highest as per different considerations under Regulation 20(4). Hence, it most respectfully submitted that Offer Price was not in compliance with the SAST Regulation.

I.3

THE ACTIONS NATURE.

OF

MAJORITY SHARE HOLDERS ARE OPPRESSIVE IN

I.3.1 The Actions of the Majority shareholders towards the Minority shareholders are oppressive in nature. I.3.2 Respondent No.1 and Respondent No. 2 by virtue of their transactions as mentioned supra had become the majority shareholders in the Petitioners Company i.e. AHL. Hence Respondent No. 2 became the Personal Acting in
concert with him for acquisition, if any, including by way of allotment in a public or rights or preferential issue during the twenty-six week period prior to the date of public announcement, whichever is higher.

MEMORANDUM FOR PETITIONER

Issue 1

Arguments Advanced Concert making him jointly and severally responsible for fulfilment of the obligations if any of the Acquirer25.

I.3.3 A resolution prejudicing the interests of the company26 or its shareholders amounts to oppression27, further a lack of probity and fair dealing in the affairs of a company to the prejudice of some portion of its members would amount to oppression.28 I.3.4 It was held by Honble Supreme Court that a conduct which lacks in probity, conduct which is unfair to and which causes prejudice to the petitioner in the exercise of his legal and proprietary rights as a shareholder must be shown to exit29, would amount to oppression which is the matter in the instant case. I.3.5 Oppression may take different forms and need not necessarily be for obtaining pecuniary benefit. It may be due to a desire to obtain power and control, or be merely vindictive.30 I.3.6 Since the offer price and timing of the AHL offer was not in compliance with the SAST regulation, it clear that its illegal in nature, further it was held in Sheth Mohanlal Ganpatram v. Shri Sayaji Jublee Cotton and Jute Mills Co. Ltd.31, that a series of illegal events which result in affecting a community at large is an act of oppression. I.3.7 It was held by BUCKLEY, J32

25

Regulation 22(19) of SAST Regulation, 1997 states that The acquirer and the persons acting in concert with him shall be jointly and severally responsible for fulfillment of obligations. 26 In the instant case AHL 27 A.M. Varkey v. J.R. Motishaw, AIR 1964 Ker 114 28 Elder v. Elder & Watson. Ltd., (1952) Scottish Cases 49, Scottish Co-operative Wholesale Society Ltd. v. Meyer, (1958) 3 All ER 66 : (1959) 29 Com Cases 1, Jermyn Street Turkish Baths Ltd., In Re, (1971) 3 All ER 184 29 Needle Industries (India) Ltd. v. Needle Industries Newey (India) Holding Ltd., (1981)51 Com Cases 743 (at 782): AIR 1981 SC 1298. 30 K.R.S. Narayana Iyengar v. T.A. Mani, AIR 1960 Mad 338 31 (1964) 34 Com Cases 777 (guj) 32 H.R. Harmer Ltd., (1958) 3 All ER 689: (1959) 29 Com Cases 305

MEMORANDUM FOR PETITIONER

Issue 1

Arguments Advanced That oppression occurs when shareholders, having a dominant power in a company, either by
(1) exercise that power to procure that something is done or not

done in the conduct of the companys affairs or

(2) procure by a an express or implicit threat of an exercise of that

power that something is not done in the conduct of the companys affairs. I.3.8 In the instant case Respondent No. 1 had a transaction with Respondent No.2. They had offered up to Rs. 500 per equity share while the same was not executed in case of the Petitioners Company. Also the timing of the offer during TPL offer which was made on January 20, 2009 which was in compliance with SAST regulation. But the offer which was made May 15, 2009 for AHL shareholders was offered after long time as they waited for the share price to reduce. I.3.9 Further, it was held in R.N. Jalan v. Deccan Enterprises P. Ltd33 that for increasing the share capital of the company and gaining control of the company, the affairs of the company should not be demeanour in a manner oppressive to the minority shareholders and their associates if any. Hence, it is most humbly submitted that the actions of the Majority shareholder were oppressive in nature. I.4 FUNDAMENTAL RIGHTS ARE VIOLATED I.4.1Respondent No.1 and Respondent No. 2 have violated the basic fundamental rights of the Petitioner i.e. Art.1434 and Art.2135 as enshrined in Constitution of
33 34

(1992) 75 Com Cases 417 at p.438 (AP) Art. 14 of Constitution of India state that Equality before law The State shall not deny to any person equality before the law or the equal protection of the laws within the territory of India. 35 Art. 21 of Constitution of India state that No person shall be deprived of his life or personal liberty except according to procedure established by law.

MEMORANDUM FOR PETITIONER

Issue 1

Arguments Advanced India by depriving them of the basic rights and liberties that needs to be protected.

I.4.2 Only a person, who is aggrieved by the alleged discrimination, can challenge the validity of a law on the grounds of the violation of Art.14 36, the aggrieved person would mean a person who had suffered legal injury or one who has been unjustly deprived or denied of something, which he would be interested to obtain in the usual course or similar benefits or advantage or results in wrongful affectation of his title to compensation37. In the instant case the Petitioner and the shareholders are the aggrieved persons who are aggrieved who have been unjustly denied the proper share price offered to them by Nabelung. I.4.3Denial of equal protection in the exercise of statutory direction. It would follow from the foregoing discussion that where the statute vests a discretionary power in an administrative authority, the court would not interfere with the exercise of such discretion unless it is made with oblique ends or extraneous purposes or upon extraneous consideration38 or arbitrarily, without applying its mind to the relevant considerations, or where it is not guided by any norms which are relevant to the object to be achieved39. I.4.4It is submitted that Respondent No.1 and Respondent No.2 being the Majority shareholders had to follow their obligation towards the Petitioners Company in a fair and just procedure40 which deprived their right of not having the deserved price as they had to price the share value correctly which lead deprivation followed by timing of the offer as mentioned supra and the same is violated. I.4.5 Further, deprivation constitutes that there must direct, overt and tangible act which intimidate the fullness of the life of a person or members of the

36 37

Ramana Dayaram Shetty v. IAAI., AIR 1979 SC 1628 Babu Ram v. State of U.P (1995) 2 SCC 689 (para 16 and 18) 38 State of Punjab v. Gurdial Singh, AIR 1980 SC 319 (paras 8-9) 39 Suman v. State of J&K, AIR 1983 SC 1235 (para 6). 40 Dutta Associates Pvt. Ltd v. Indo Mercantiles Pvt. Ltd (1997) 1 SCC 53(para 7)

MEMORANDUM FOR PETITIONER

Issue 1

Arguments Advanced community, as distinguished from vague or remote acts threatening the quality of life of people at large.41

I.4.6 In the instant case, by not offering the exact/accurate price of the shares for the shareholders and not following the SAST Regulations as mentioned supra affecting the quality life of the shareholder at large. Hence, Majority shareholders have violated the fundamental rights of the Minority.

In light of the above discussion, it is submitted to this Honble Court that the timing and the offer price made to the shareholders i.e. the espoused practices are Malfeasance in nature.

41

Ramsharan Autyanuprasi v. Union of India, AIR 1989 SC 549

MEMORANDUM FOR PETITIONER

Issue 2
II.

Arguments Advanced

THE SECURITY AND EXCHANGE BOARD OF INDIA (SEBI) HAS NOT PERFORMED ITS FUNCTIONS AS ENVISAGED IN THE ACT.

2.0.1

It is most humbly submitted to this Honble Court that the Petitioner seek an

answer to the above raised issue in Affirmative. The Petitioner submits that the Security and Exchange Board of India (SEBI) has not performed its functions as envisaged in the Act42.
2.0.2

It is submitted that the Petitioner had sent a communication regarding to the

raising of issues with the offer price of Rs.155/- made by the Respondent No.1 in order to acquire the share through public offer of the AHL43.
2.0.3

The SEBI is under a clear obligation to protect the interest of the Investors in

Securities and to promote the development of, and to regulate the securities market as per Reg. 11(1)44 SEBI Act, 1992. The same was held in M Z Khan v. SEBI45. 2.0.4 But in the instant case the Board was not in complacence with aforesaid

regulation by not replying or to the communication sent by Mr. Srinivasa Shetty hereinafter the Petitioner.
2.0.5

Further it is due responsibility of the SEBI to regulate Fraudulent and unfair

trade practices if any as per Reg. 11(2) (e)46 and regulate substantial acquisition of shares and take-over of companies as per Reg. 11(2) (h)47.
2.0.6

In Ramrakh R Bohra v. SEBI48, it was held that powers of SEBI to issue

directions are of widest amplitude are exercisable in interest of Investors. In the

42 43

The Securities And Exchange Board Of India Act, 1992, No.15 of 1992 Statement of Facts 44 Regulation 11(1) states that :Subject to the provisions of this Act, it shall be the duty of the Board to protect the interests of investors in securities and to promote the development of, and to regulate the securities market, by such measures as it thinks fit. 45 (1999)19 SCL 253, 34 CLA 445, AIR 1999 Del 164. 46 Regulation 11 (2)(e) states that prohibiting fraudulent and unfair trade practices relating to securities markets. 47 Regulation 11 (2)(h)states that: regulating substantial acquisition of shares and take-over of companies. 48 (1998) 18 SCL 543

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Issue 2

Arguments Advanced

instant case the share value was reduced to Rs.155/- which was detrimental to shareholders of the Petitioners Company.
2.0.7

The Respondent No.3 must have acted to the communication dispatched by the

Petitioner in accordance with Reg. 549 of Prohibition Of Fraudulent and Unfair Trade Practices Relating To Securities Market) Regulation, 2003.
2.0.8

Further, it was held Integrated Amusement Ltd v. SEBI50 in it is duty of SEBI to

Investigate51 into the matter when the transactions of the Securities are dealt in detrimental to the investor.
2.0.9

It was held in Triumph International Finance v. SEBI52 that it is the duty of

SEBI to investigate into the matter where there is manipulation prices related to shares was held, but in the instant case though there was manipulation of accounts and share 53 value of Petitioners Company. Hence, in the light of the above arguments, it is most respectively submitted that Security and Exchange Board of India have not compiled by their duties and must be directed to perform duties by this Honble Court by issuing writ of Mandamus.

49

Where the Board, the Chairman, the member or the Executive Director (hereinafter referred to as appointing authority) has reasonable ground to believe that (a) the transactions in securities are being dealt with in a manner detrimental to the investors or the securities market in violation of these regulations; (b) any intermediary or any person associated with the securities market has violated any of the provisions of the Act or the rules or the regulations, 50 2000(27) SCL 458 51 the transactions in securities are being dealt with in a manner detrimental to the investors or the securities market 52 (2001)33 SCL 363(SAT) 53 6,Statement of Facts

MEMORANDUM FOR PETITIONER

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Issue 2

Arguments Advanced

MEMORANDUM FOR PETITIONER

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Issue 3
III.

Arguments Advanced

THE FRAUDULENT CONDUCT OF MR.SINGHANIA HAS RESULTED IN DOWNFALL OF STOCK PRICES OF AHL.
3.0.1 It is most humbly submitted to this Honble Court that Mr. Singhania is

the Managing Director54 of AHL, herein after Respondent No. 4 has committed fraud by manipulating the accounts of the company and has violated his fiduciary duties and applicable law which has paved way for disastrous consequences, least conducive to the interest of AHL.

3.1

MR.SINGHANIA HAS VIOLATED HIS FIDUCIARY DUTIES.

3.1.1 The fraudulent activities have resulted in violation of fiduciary duties55 and

has paved way for disastrous consequences, least conducive in the interest of AHL.
3.1.2 The Directors are the brain and only brain of the company which is the body

and the company can and does act only through them.56
3.1.3 Every officer/employee of the Organization/Institution is required to take all

possible steps to protect the interests of the Organization/Institution and to discharge his duties specially if they are fiduciary in nature with utmost integrity, honesty, devotion and diligence and to do nothing which is affects the growth of the Organization/Institution57.
3.1.4 The above said Respondent submitted his resignation indicating that he had

falsified accounts over several years which resulted in collapse of AHL share value.
3.1.5 In pursuance of the above the said Respondent is guilty of committing insider

trading by manipulating the accounts/or periodical financial result of the

54 55

Sec 2(13) of Companies Act something more than the ordinary honor of the marketplace ... the very punctilio of honesty and forthrightness. as defined by justice Benjamin Nathan Cardozo, http://www.businessdictionary.com 56 Bath v. Standard Land Co. (1910) 2 Ch., 408 57 State Bank of India v. Bela Bagchi, 2005 (7) SCC 435

MEMORANDUM FOR PETITIONER

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Issue 3

Arguments Advanced company which are price sensitive information as per 2(ha) of Prohibition of Insider Trading Regulation, Act 199258

3.1.6 He was in to act to in the interest of the Company and must have not ratified

and falsified the records and misappropriated funds for his personal

benefit/gain. The Directors are trustees of the Companys money and property which mean they must exercise their powers honestly and in the interest of the Company only.59
3.1.7

In the instant case, Managing Director i.e. Respondent No.4 acted dishonestly in the interest of the company, resulting in breach of fiduciary duty. Most of the powers of Directors are powers in trust and, therefore, should be exercised in the interest of the company and, not in the interest of the Directors or, any section of members. If the sane is done it would amount to violation of fiduciary duties.60 Mr. Singhania acted within his own interest and had manipulated the accounts for a several years which nothing but gross violation of his Fiduciary duties.

3.1.8 As fiduciaries they must exercise their powers honestly and bona fide for the

benefit of the company as a whole and should not place themselves in a position where is a conflict between their duties to the company and their personal interest. They must not make any secret profit out of their position.61
3.1.9 The Supreme Court of India held that the fiduciary capacity within which

the directors have to act enjoins upon them a duty to act on behalf of a company with utmost good faith, utmost care and skill and due diligence and in the interest of the company they represent. They have a duty to make full and honest disclosure to the shareholders regarding all important matters relating to the company.62
58

Regulation 2(ha) of Prohibition of Insider Trading Regulation, Act 1992 states that Price Sensitive Information means any information which relates directly or indirectly to a company and which if published is likely to materially affect the priceof securities of company. 59 N.D Kapoor, Elements of Mercantile Law, Sultan Chand & sons, 25th Ed. 60 A. Ramaiah, Guide to Companies Act, Wadhwa & Co Nagpur, 14th ed. 61 City Equitable Fire Insurance Co. Ltd v. Mr.B 62 Dale & Carrington P. Ltd. v. P.K. Prathapan 122 Comp Cas 161 (SC)

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Issue 3

Arguments Advanced

3.1.10 Further, it was held that Where the person deals with public money or is

engaged in financial transactions or acts in a fiduciary capacity, the highest degree of integrity and trustworthiness is a must and unexceptionable, if that capacity is misused that misconduct must be dealt with iron hands63.
3.1.11 Mr. Singhanias unwise, inefficient or careless behaviour resulted in carrying

out the company affairs in oppressive64 manner which are prejudicial in the Company, its members and the share holders65 leading to gross reduction of the share value.
3.1.12 Further, it was know that Respondent No. 4 had surfaced large sums of

money as a consequence of the falsification, and such amounts was misappropriated via the benami accounts66 which is illegal as per Sec 3(1)67 and must be punished for the same as per Sec. 3(3)68 of The Benami Transactions (Prohibition) Act, 1988
3.1.13 Hence it is most submitted that the Respondent No.4 has violated his

fiduciary duties which he was supposed to follow for the betterment of the company.

3.2

MR.SINGHANIA IS LIABLE FOR PUNISHMENTS UNDER THE PENAL CODE OF INDIA.

63 64

S. Mani v. Chairman v. Managing Director Syndicate Bank and ors Oppression means: An act of cruelty, severity, unlawful exaction, domination, or excessive use of authority, Pramanatha Aiyar, Concise Law Dictionary, 3rd ed. (Wadhwa Nagpur 2008) 65 Needle Industries(India) Ltd v. Needle Industries Newey(India) Holding Ltd (1981) 51 Com Cases 743, AIR 1981 SC 1298 66 Sec 2(a) of The Benami Transactions (Prohibition) Act, 1988 states that Benami transaction means any transaction in which property is transferred to one person for a consideration paid or provided by another person 67 Sec 3(1) of The Benami Transactions (Prohibition) Act, 1988 states that No person shall enter into any benami transaction 68 Sec 3(3) of The Benami Transactions (Prohibition) Act, 1988 states that Whoever enters into any benami transaction shall be punishable with imprisonment for a term which may extend to three years or with fine or with both.

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Issue 3

Arguments Advanced

3.2.1 It is submitted that Respondent No.4 is liable for punishment under the Indian

Penal Code, 1860 for falsifying accounts under the following sections
a. Forgery69. b. For making false documents70 c. For Falsification of Accounts71

69

Sec 463 of IPC states that Whoever makes any false documents or part of a document with intent to cause damage or injury, to the public or to any person, or to support any claim or title, or to cause any person to part with property, or to enter into any express or implied contract, or with intent to commit fraud or that fraud may be committed, commits forgery. 70 Sec 464 of IPC states that A person is said to make a false document First Who dishonestly or fraudulently makes, signs, seals or executes a document or part of a document, or makes any mark denoting the execution of a document, with the intention of causing it to be believed that such document or part of a document was made, signed, sealed or executed by or by the authority of a person by whom or by whose authority he knows that it was not made, signed, sealed or executed, or at a time at which he knows that it was not made, signed, sealed or executed; or Secondly Who, without lawful authority, dishonestly or fraudulently, by cancellation or otherwise, alters a document in any material part thereof, after it has been made or executed either by himself or by any other person, whether such person be living or dead at the time of such alteration; or Thirdly Who dishonestly or fraudulently causes any person to sign, seal, execute or alter a document, knowing that such person by reason of unsoundness of mind or intoxication cannot, or that by reason of deception practised upon him, he does not know the contents of the document or the nature of the alteration. 71 Sec 477A of IPC states that Whoever, being a clerk, officer or servant, or employed or acting in the capacity of a clerk, officer or servant, wilfully, and with intent to defraud, destroys, alters, mutilates or falsifies any book, paper, writing, valuable security or account which belongs to or is in the possession of his employer, or has been received by him for or on behalf of his employer, or wilfully, and with intent to defraud, makes or abets the making of any false entry in, or omits or alters or abets the omission or alteration of any material particular from or in, any such book, paper, writing, valuable security or account, shall be punished with imprisonment of either description for a term which may extend to seven years, or with fine, or with both.

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Issue 3

Arguments Advanced

3.2.2 It was held that to punish or prosecute under the offense of falsification of

accounts, it must be proved that there is loss or disadvantage for the person who was defrauded72
3.2.3

In the Instant case the persons who are defrauded are the shareholders and other persons in connection with the Company, hence he liable for punishment under Sec.46573

3.2.4 Further Mr.Singhania has cheated the Company and mainly the shareholders

under Sec. 418 and Sec.420 of the Indian Penal Code, 1860 for cheating with knowledge that wrongful loss may ensue to person whose interest offender is done with the knowledge and to protect. In addition, certain provisions of the Companies Act too provide for imprisonment for violations by the directors and officers in default.
3.2.5 Finally, the Respondent No. 4 is liable for prosecution under Section 40674 of the

IPC for criminal breach of trust. Hence, in the light of the above arguments it is most respectively submitted to this Honble Court that the Respondent No.4 has committed fraud with respect accounts and other related documents and must be prosecuted for the same.

72 73

Jibrial Diwan v. State of Maharashtra, 1997 CrLJ 4070, AIR 1997 SC 3424 Sec 406 of Indian Penal Code, 1860 states that Whoever commits forgery shall be punished with imprisonment of either description for a term which may extend to two years, or with fine, or with both. 74 Sec 406 of Indian Penal Code, 1860 states that Whoever commits criminal breach of trust shall be punished with imprisonment of either description for a term which may extend to three years, or with fine, or with both.

MEMORANDUM FOR PETITIONER

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Issue 4
IV.

Arguments Advanced

POPIL HAD BEEN NEGLIGENT IN ITS CAPACITY AS THE STATUTORY AUDITORS OF AHL.

IV.1.1 The Petitioner seek an answer to the above raised issue in affirmative, it is respectfully submitted to this Honble Court that the Purantee Ocsipep India Private Limited (POPIL) had been negligent in its capacity as the statutory auditors of AHL. IV.1.2 Statutory Auditors are auditors who are appointed under a Statute75 in every Annual General Meeting (AGM) by the Board of Directors. IV.1.3 It is very essential for an Auditor to give a true and fair view in respect to the accounting and financial situation of the company which forms a base for the shareholders to invest their hard earned money in the company. IV.1.4 Further, it is the duty of the Auditor to file an audit which may be said to be skilled examination of such books, accounts and vouchers as will enable the auditor to verify the balance-sheet. The main objects of any audit are76: (a) To certify the correctness of the financial position as shown in the balancesheet, and the accompanying revenue statements. (b) The detection of errors. (c) The detection of fraud77. The detection of fraud is generally regarded as being of primary importance.78

75 76

The Companies Act, 1956, Act No.1 of 1956 [18th January, 1956] A. Ramaiah, Guide to Companies Act, Wadhwa & Co Nagpur, 14th ed. Pg 1781 77 Fraud- Fraud means and includes any of the following acts committed by a party to a contract, or with his connivance, or by his agent, with intent to deceive another party thereto or his agent, or to induce him to enter into the contract: the suggestion, as to a fact, of that which is not true by one who does not believe it to be true; the active concealment of a fact by one having knowledge or belief of the fact; a promise made without any intention of performing it; any other act fitted to deceive; any such act or omission as the law specially declares to be fraudulent. 78 Frankston and Hastings Corpn. V. Cohen, (1960) 102 CLR 607 (Commonwealth Law Reports) at 617

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Issue 4

Arguments Advanced

IV.1.5 In the instant case the Statutory Auditors have not compiled by their duties 79 as mentioned in the aforementioned act resulting to falsification of accounts80 over a period of several years amounting to Fraud. IV.1.6 Also they must certify the annual statements of funds utilized for the purpose other than stated purpose.81 By not compiling with the said duties the POPIL, the fifth Respondent has accounted to Professional Negligence82. IV.1.7 Further, an audit is intended for the protection of the shareholders and the auditor is expected to examine the accounts maintained by the directors with a view to inform the shareholders of the true financial position of the company.83 IV.1.8 A professional accountant holds himself out to the public as an expert trained and equipped for and qualified to render multifarious services. He has to render these services with due care, skill and diligence and according to generally accepted standards of performance. A negligent act would, therefore include a careless or reckless act or failure to perform a duty enjoined upon a person. IV.1.9 As a Statutory Auditor, they should not rely merely on the statement from the management in regard to accounts of the company as he is in a capacity
79

Sec 227(1) of Companies Act states that Every auditor of a company shall have a right of access at all times to the books and accounts and vouchers of the company, whether kept at the head office of the company or elsewhere, and shall be entitled to require from the officers of the company such information and explanations as the auditor may think necessary for the performance of his duties as auditor. 80 5 , Statement of Facts 81 Clause 49(d)(1) of Listing Agreement states that Oversight of the companys financial reporting process and the disclosure of its financial information to ensure that the financial statement is correct, sufficient and credible. 82 A negligent act is an act done without doing something which is reasonable man guided upon the considerations which ordinarily regulate the conduct of human affairs would do or an act which a prudent or reasonable man would not do in the circumstances attending it. 83 Institute of chartered accountants v. P.K. Mukherjee, (1968) 38 Com Cases 628: AIR 1968 SC 1104; CIT v. G.M. Dandekar, (1952) 22 Com Cases 356, 359 (Mad)

MEMORANDUM FOR PETITIONER

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Issue 4

Arguments Advanced to have direct accesses and verification of all accounting book84.The statement that the Auditor merely depended on the Management for its financial and has not done required scrutiny, the Honble High Court of Calcutta held that the Auditor is grossly negligent of his duties.85

IV.1.10

The purpose of having a Statutory Auditor is to provide a mechanism to

enable those having a proprietary interest in the company or being concerned with its management or control to have access to accurate financial information about the company, if this purpose is not met the whole point of having a Statutory Auditor is exhausted.86 An Auditor is bound to verify the assets of a company himself, and not rely on the verification done by persons appointed by the persons appointed by company himself.87 IV.1.11 Further, the position of the Statutory Auditor has a fiduciary relationship

vis-a-vis the Shareholders as a body88. Also the examination by an independent agency such as the auditor is practically the only safe ground which shareholders have against the enterprise being carried on in unbusiness like way or their money being misapplied or misappropriated without their knowledge anything about it.89 IV.1.12 In the instant case the Statutory Auditor have not abided their fiduciary

relationship with the shareholder in presenting a true picture of financial position of the Company leading to rise in the assets and plummeting of value resulting into the crash of the Company.

84 85

A. Ramaiah, Guide to Companies Act, Wadhwa & Co Nagpur, 14th ed.Pg.1827 Controller of Insurance v. H.C Das, AIR 1957 Cal 387 86 Berg Sons & Co. Ltd. v. Mervyn Hampton Adains, 1993 BCLC 1045 (QBD) 87 Institute of Chartered Accountants v. Rajaram , (1960) 30 Com Cases 67 (Mad) 88 A. Ramaiah, Guide to Companies Act, Wadhwa & Co Nagpur, 14th ed. Pg 1781 89 Deputy Secretary to the Government of India, Ministry of Finance v. S. N. Das Gupta, (1995) 25 Com cases 413: AIR 1955 Cal 414

MEMORANDUM FOR PETITIONER

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Issue 4

Arguments Advanced

Hence, in the light of the above arguments, it is most respectively submitted that POPIL has been completely negligent as Statutory Auditor amounting to professional negligence.

MEMORANDUM FOR PETITIONER

21

Prayer
PRAYER Wherefore in the light of the facts and circumstances, the cases cited, issues raised, arguments advanced and authorities cited, the Petitioner humbly prays that this Honble Court may be pleased to kindly:

1. Declare Malfeasance on part of the Respondents No. 1 and No. 2 2. Declare Inaction on part of SEBI. 3. Declare Fraud on part of Respondent. No. 4 4. Declare Professional Negligence on part of Respondent No.5

Place: New Delhi Date: 8th November, 2009

Respectfully Submitted, COUNSEL FOR PETITIONER

MEMORANDUM FOR PETITIONER

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