NUJS-HSF Moot Court Competition, 2015: Finalists - Appellants

IN THE HIGH COURT OF CALCUTTA

AT CALCUTTA Letters Patent Appeal No. ____/2013 (Under Clause 15 of Letters Patent for the H!h Court of Cal"utta# 1$%5&

Celltone pl"'''''''''''''. '''''''''''''...Appellant . )nd*o+le Tele"o,s Tele"o,s L,ted# 5- tar Netors L,ted''''''''''''''''''''...espondents

Clubbed with

Letters Patent Appeal No. ____/2013 (Under Clause 15 of Letters Patent for the H!h Court of Cal"utta# 1$%5&

Celltone pl" '''''''''''''. ''''''''''''''...Appellant . and an'''''.''''''''''...''''''.''''''espondent

Clubbed with

Letters Patent Appeal No. ____/2013 (Under Clause 15 of Letters Patent for the H!h Court of Cal"utta# 1$%5&

Celltone pl" '...'''''''''''''. '''''''''''''.Appellant . */s arsh Le!al Asso"ates''''''''...''''''''''''.espondent

4rtten su+,ssons on +ehalf of# Tea, Tea, Code H156 Counsel for the Appellant. TABLE OF CONTENTS

7TH NUJS-HSF NATIONAL CORPORATE MOOT COURT COMPETITION , 2014-2015

Lst of A++reatons....................... A++reatons.............................................. .............................................. .............................................. .............................................3 ......................3 )nde7 of Authortes...................... Authortes............................................. ............................................... ............................................... ...............................................5 ........................5 tate,ent of 8ursd"ton.................................... 8ursd"ton........................................................... .............................................. ...............................................10 ........................10 9uestons Presented................................ Presented....................................................... .............................................. .................................................. ................................... ........11 11 tate,ent of 6a"ts............................................. 6a"ts.................................................................... .............................................. ................................................ .........................12 12 u,,ar: of Pleadn!s............................... Pleadn!s...................................................... .............................................. ............................................... ................................1 ........1% % Pleadn!s..................................................................................................................................20 ).

The )n" )n"dent dentss urroun urroundn! dn! the the Lo) Lo) A,ou A,ounted nted to to a 6raudul 6raudulent ent rea" rea"h h of the the AA... AA........ .....20 20 ;A<. The Lo) as =nfor"ea+le and Le!all: >ald................................................................21 ;C<. 5- tar?s s"losure as )neffe"te and Celltone?s noled!e dd not estr"t a Cla, for f or rea"h rea" h of 4arrant:.............................. 4arrant:..................................................... .............................................. ......................................... ..................23 23 ;<. The epresentaton n the AA a,ounted to 6raudulent *srepresentaton.......... *srepresentaton..... .........2@ ....2@

)).

The )n"dents )n"dents urroundn! urroundn! the Cal"utta L"ense A, A,ount ount to to a...... a........... ............... .................... ...................25 .........25

rea"h of o f the AA...................................... AA............................................................. .............................................. ................................................... ...............................25 ...25 ;A<. The Condu"t of )nd*o+le and 5- tar as n >olaton of La................................25 ;< The >olaton of the La led to an Ad,nstrate an"ton h"h had a *ateral ),pa"t............................................... ),pa"t...................................................................... .............................................. .............................................. ......................................2$ ...............2$ ;C< Ths s Attr+uta+le to the Co,pan: and the: "an +e held La+le for the sa,e............2$ ))).

The )n"orr )n"orre"t e"t APU APU 6!ur 6!ures es a,ount a,ount to to 6raudule 6raudulent nt *srep *sreprese resentat ntaton. on..... ........ ........ ........ ..........2 ......2

;A<. The Clarf"aton fro, 5- TA as >a >a!ue and )nsuff"ent.....................................2 )nsuff"ent.....................................2  ;<. The )ntal ProBe"tons A,ount to 6raudulent *srepresentaton.................................31 )>. )>. >.

The a,a!es a,a!es Cla,ed Cla,ed should should +e Aarded....... arded............ .......... .......... .......... .......... .......... .......... ......... ......... .......... .......... ...........32 ......32 and an an s +l!ated +l!ated to elease elease the the =s"ro A,ount.... A,ount......... .......... .......... .......... .......... .............. ................... ...........33 .33

;A<. )nde,nf"aton o+l!aton has +een tr!!ered.............................................................33

MEMORIAL FOR THE FOR THE APPELLANTPAGE 2


;<. a,a!e has +een Caused due to su"h a rea"h...........................................................3@ ;C<. The =s"ro A!ent s +ound to 6ollo the )nstru"tons n the =s"ro A!ree,ent......3@ >).

LA s La+le La+le to to Pa: a,a a,a!es !es for ende endern rn! ! an )n"orre" )n"orre"tt pnon. pnon.... ....... ........ ........ ........ ........ .......35 ...35

;A<. The pnon endered +: LA s )n"orre"t sn"e t A,ounts To Ne!l!ent *srepresentaton.................................................................................................................35 ;<. Celltone has a r!ht to sue LA....................................................... LA.............................................................................. .............................3D ......3D ;C<. Celltone?s ue l!en"e does not pre"lude ts "la, a!anst LA.............................3$ ;<. LA s La+le to Pa: a,a!es....................................................................................3$ >)).

The A"ts A"ts f The The -oern,ent -oern,ent A,ount A,ount To To =7propraton. =7propraton...... .......... .......... .......... .......... .......... ............. ..............3 ......3

;A< Celltone s an nestor...................................................................................................3 ;< The H!h Court 8ud!,ent A,ounts to )ndre"t =7propraton.....................................3 ;C< No AntEAr+traton )nBun"ton should +e entertaned...................................................@0 Pra:er.......................................................................................................................................@1 Append7 )........................................... ).................................................................. .............................................. .............................................. .......................................@2 ................@2



LIST OF ABBREVIATIONS

F

Para!raph

AC

Appeal Cases

A)

All )nda eporter

All =

All =n!land eports

AoA

Art"les of Asso"aton

APU

Aera!e eenue Per Unt

CLC

utterorths Co,pan: La Cases

) T

A!ree,ent +eteen The -oern,ent and epu+l" of )nda and The -oern,ent of the Unted Gn!do, of -reat rtan and Northern )reland for the pro,oton and prote"ton of nest,ents

o,L

o,+a: La eporter

Ch

Chan"er:

Ch..

Chan"er: son

Cr.

Cr"ut

CLC

Co,pan: La Cases

Colo.

Colorado upre,e Court

CT

Cla,s Tr+unal eports

C>C

Chef >!lan"e Co,,ssoner

el. Ch.

elaare Court of Chan"er:

el. C.

elaare upre,e Court

LA

arsh Le!al Asso"ates

=.. Pa.

=astern str"t of Penns:lana

=dn.

=dton

=4CA

=n!land and 4ales Court of Appeal

=4HC

=n!land and 4ales H!h Court

HL

House of Lords

)C)

)nternatonal Centre for ettle,ent of )nest,ent sputes



Llo:d?s ep

Llo:ds La eports

Lo)

Letter of )ntent

LT

The La T,es eports

*ass. App. Ct.*assa"husetts Appeals Court *ass. uper.

*assa"husetts upre,e 8ud"al Court

N.C.

North Carolna upre,e Court

N..-a.

Unted tates str"t Court for the Northern No rthern str"t of -eor!a

N.I. N.I.

Ne Ior Ior Court of Appeals Appeals

PC

Pr: Coun"l

PCA

Preenton of Corrupton A"t

9

9ueens en"h

..N.I

U.. str"t Court for the outhern str"t of Ne Ior

AA

hare A"Juston A!ree,ent

C

upre,e Court

CC

upre,e Court Cases

CL

"ottsh Coun"l of La eportn!

=)

e"urtes and =7"han!e oard of )nda

upp.

upple,ent

TL

The T,es La eports

UGHL

UG House of Lords

4L

4eel: La eport



INDEX OF AUTHORITIES In!"n C"#$#

1. Centre for Pu+l" Pu+l" )nterest )nterest Lt!aton Lt!aton . . Unon Unon of )nda# A) 2012 2012 CC 11D'''2 11D'''2D D 2. resser and and .A. . */s. ndal ndal A!ro A!ro Che,"al Che,"al Ltd. K Another# Another# A) 200% C $35D''''''.'''''''''''''''''''''.22 3. -aBanan *oresha *oresharr Parelar Parelar . *oreshar *oreshar *adan# A) 1@2 * @@''''..3@ @@''''..3@ @. )rdu, )nda Tele Tele"o, "o, Ltd. Ltd. . . *otorola *otorola )n"orporated )n"orporated and rs.# rs.# A) 2011 CC D@............................................... D@...................................................................... .............................................. .............................2%#2 ......2%#2 5. 8et Ara:s Ara:s ()nda& ()nda& L,ted L,ted . . ahara ahara Arlnes Arlnes L,ted L,ted K rs# rs# A) 2011 * D3@'''''''''''''''''''''''''3@ %. Ga,al Gant Gant Palal Palal . . ,t ,t Praash e Palal# Palal# A) 1D% aB D'''''' D''''''.2@ .2@ D. *..*adhusoodha *..*adhusoodhanan nan . Gerala Gau,ud Gau,ud Pt. Pt. Ltd.# Ltd.# (200@&  CC 20@''...''@@ 20@''...''@@ $. C Thaar Thaar . . -uBarat -uBarat HH- oard# oard# A) A) 1D3 -uB -uB 3@''''''''' 3@''''''''''''31 '''31 U% C"#$#

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STATEMENT OF JURISDICTION

APPEAL I

The appellant has approa"hed ths Honoura+le Court under Clause 15 of Letters Patent for the H!h Court of Cal"utta# 1$%5.

APPEAL II

The appellant has approa"hed ths Honoura+le Court under Clause 15 of Letters Patent for the MEMORIAL FOR THE FOR THE APPELLANTPAGE 9


H!h Court of Cal"utta# 1$%5.

APPEAL III

The appellant has approa"hed ths Honoura+le Court under Clause 15 of Letters Patent for the H!h Court of Cal"utta# 1$%5.

/UESTIONS PRESENTED

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STATEMENT OF FACTS

THE BAC%GROUND

)nd*o+le )nd*o+le Tele"o,s ele"o,s L,ted ;Q)nd*o+le?<# a "o,pan: n"orporated n )nda and a ,e,+er of Nft: 50# s a su""essful tele"o, eJup,ent "o,pan:. The "har,an and ,ana!n! dre"tor of the "o,pan: s *r ardar# ho alon! th hs fa,l:# s also the pro,oter of the )nd*o+le and holds 35R of the shares n the "o,pan: th the,. )n order to enter the tele"o, ser"es +usness# )nd*o+le de"ded to +d for the l"enses for 5- ,o+le netors to +e !ranted +: the -oern,ent of )nda ;Q-o)?<. 6or housn! ths tele"o, ser"e +usness# a holl: oned su+sdar: na,ed 5- tar Netors L,ted ;Q5tar?< had +een set up +: )nd*o+le. THE AARD OF LICENSES



)n the +ddn! pro"ess "ondu"ted +: the -o) n 2013# +ds ere pla"ed +: 5- star for Golata# Chenna and H:dera+ad "r"les. 5- star satsfed satsfed +oth the te"hn"al and fnan"al "rtera and as as su""e su""essf ssful ul n +a!! +a!!n! n! the the l"ens l"ensee for Gola Golata ta and H:der H:dera+a a+ad. d. Th Thee a"tual a"tual l"e l"ense nse a!ree,ents ere e7e"uted +eteen 5- tar and the -o) on Noe,+er 1# 2013. )n order to sour"e the e7pertse reJured to run ths ne +usness# )nd*o+le nted Celltone pl"# a UG +ased leadn! l eadn! tele"o, ser"es ser "es "o,pan: "o ,pan: ho a!reed to nest nes t U S@0 ,llon for fo r a stae of o f @R n 5- star. THE DUE DILIGENCE PROCESS

Celltone had a ero toleran"e pol": for "orrupton and hen"e adopted a "autous approa"h +efore fnaln! the deal. )t de"ded to "ondu"t a full +lon due dl!en"e and for ths purpose# apponted */s Le7,an Le7 ,an Asso"ates# a leadn! lead n! )ndan )n dan la fr, and A Partners# a leadn! a""ountn! fr,. urn! a ,eetn! n Golata# *r -an!ston# the proBe"t ,ana!er of Celltone# as assured +: 5- tar?s representates that the pro"ess of aard of l"enses as transpar transparent ent and entrel: entrel: a+oe +oard. +oard. Cellton Celltonee and ther ther la:ers la:ers and a""ounta a""ountants nts ere ere proded full a""ess to all the releant +oos and re"ords of 5- tar and to the e7tent ne"essar:# those of )nd*o+le. urn! further nest!aton# nest!aton# *r -an!ston "a,e a"ross a for,er e,plo:ee of )nd*o+le ho reealed that n the past the "o,pan: entertaned entertaned !oern,ent e,plo:ees and shoered the, th !fts. Althou!h "on"erned a+out ths# *r -an!ston de"ded not to es"alate ths ssue to the senor ,ana!e,ent of Celltone sn"e the deal as too ,portant to +e s"uttled. THE SHARE AC/UISITION AGREEMENT

Under the ter,s of the AA# Celltone as to su+s"r+e for @R shares of 5- tar for a "onsderaton of US @0 ,llon. @0R of these shares ere to +e su+s"r+ed to Celltone out of a ne ssue of shares undertaen +: the "o,pan: for a "onsderaton of US @00 and the re,an re,ann! n! R repre represen sent tn! n! 125 125# #$ $ shares shares ere ere to +e a"Jur a"Jured ed fro, fro, )nd*o+ )nd*o+l lee for for a "onsderaton of US 0 ,llon pad to )nd*o+le ;Qale shares?<. The AA as e7e"uted on "to+er 3# 3013. THE LEGAL OPINION

A "ondton pre"edent to the AA as the ssue of a "losn! le!al opnon +: */ arsh Le!al Asso"ates ;QLA?<# the le!al "ounsel representn! )nd*o+le and 5- star h"h as ssued MEMORIAL FOR THE FOR THE APPELLANTPAGE 12


on 25th Noe,+er# 2013. LA !ae !ae arous opnons +ased on the assu,pton assu,pton that t had not "o,e a"ross an: eent or "r"u,stan"es that ould render the AA od or oda+le +: reason reason of fraud# fraud# ,srepr ,srepresen esentat taton# on# default default or la" la" of "onsde "onsderat raton. on. LA also o+taned o+taned professonal la+lt: nsuran"e orth at least U S100 fro, Pro)nsure for ths purpose. n satsfa"ton of the "ondtons pre"edent# Celltone "o,pleted the a"Juston under AA on Noe,+er 25# 2013. THE ESCRO AGREEMENT

Celltone# Celltone# )nd*o+le and 5- star entered nto an es"ro a!ree,ent a!ree,ent dated Noe,+er 25# 2013 th and an ;Qan?<# the es"ro a!ent. ased on the ter,s of ths a!ree,ent# and an as to hold 10R of the "onsderaton pa:a+le +: Celltone to )nd*o+le and 5- tar for a perod of 3 :ears fro, the "losn! date h"h as to +e appled toards satsfa"ton of an: nde,nf"aton o+l!atons of )nd*o+le and 5- tar that ,a: arse under the AA. The nde,nf"aton "lause (10.1& under the AA proded inter alia, that n the eent of da,a!es "aused due to the +rea"h of an: representaton# representaton# arrant:# arrant:# "oenant or a!ree,ent ,ade +: the )nd*o+le and 5- tar# the: ould undertae to nde,nf: and hold har,less the pur"haser to the e7tent of an: and all da,a!es suffered. )n the a+sen"e of su"h "la,# the es"ro a!ent as to the pa: the es"ro a,ount to )nd*o+le and 5- tar at the end of the sad threeE:ear perod. THE CANCELLATION OF % OL%ATA OL%ATA METRO LICENSE

After the +usness had "o,,en"ed and hu!e fnan"al nest,ents had +een ,ade# t "a,e to l!ht that the aard of l"ense to 5- star n the Golata *etro# as "hallen!ed under a rt petton fled +: Naro Tele"o, Tele"o, L,ted n e"e,+er 2013. )t as alle!ed that *r. antha an!a# a proBe"t ,ana!er at )nd*o+le# pad s 2# 50#000 to a "o,pan: oned +: *r. e+ra:a# a ,e,+er of the "o,,ttee de"dn! upon the +ds. Ths su, as pad fro, 5- star and as shon as "onsultn! "onsultn! fees n ts +oos. *r ardar "la,ed to +e unaare of an: su"h a"tons +: *r antha an!a and as Jute sho"ed. The Cal"utta H!h Court after e!hn! the serousness of the alle!atons and follon! the la lad don +: the upre,e Court# "an"elled the l"ense aarded to 5- tar for Golata. A spe"al leae petton to upre,e Court ,ade +: 5- star as ds,ssed at the ad,sson sta!e tself. INCIDENTS SURROUNDING CALCULATION OF ARPU



4hle Celltone as stll assessn! ts stuaton# ,ore ne ds"oeres ere ,ade. Celltone had +een operatn! on the assu,pton that the proBe"ted APU APU for the H:dera+ad H:dera+ad ,etro area as s 250. n +en! adsed +: A partners to "larf: the "o,ponents that ent nto "al"ulaton of APU# *r ean,an# the >"e Presdent (6nan"e& of Celltone# rased ths ssue durn! a telephone "onferen"e "all th the fnan"e personnel of 5- tar. urn! the "all# 5tar personnel "larfed that the proBe"ted APU as thout re!ards to ds"ounts and re+ates. 5- tar re,aned under the assu,pton that the nfor,aton had +een ds"losed# hoeer due to poor "onne"tt: and "ontnuous dsruptons n the "onferen"e "all# the nfor,aton as not re"eed properl: +: Celltone. Celltone dd not fnd an opportunt: to "larf: the sa,e. nl: after "losn! of Celltone?s Celltone?s nest,ent nest,ent n 5- tar t as ds"oered that the net f!ure of APU thout tan! nto a""ount the ds"ounts and re+ates as onl: s 1D5 ,pl:n! that Celltone had "onsdera+l: oerpad for ts stae n 5- tar. THE LETTER OF ETTER OF INTENT

After the n"dents surroundn! APU# Celltone !ot another sho" on re"en! a le!al not"e fro, fro, -roe -roera ra )n"# )n"# ;Q-ro ;Q-roera era?< ?< a tele" tele"o, o, "onsul "onsultan tan": ": "o,pa "o,pan: n: +ased +ased n -reen -reen "h# "h# Conne"t"ut h"h "la,ed that the sale of 125#$ shares to Celltone as lle!al sn"e )nd*o+le had s!ned an Lo) th -roera to sell t those shares. THE SUITS

Celltone de"ded to tae re,edal a"tons and fled three "l suts +efore the Cal"utta H!h Court. )t sued )nd*o+le and 5- stars to refund the pur"hase "onsderaton "onsderaton or pa: eJualent da,a!es da,a!es.. F!&# F!&#(( #+!( #+!( )t sued and an seen! release the =s"ro a,ount n faour of Celltone Celltone pursuant to the =s"ro A!ree,ent. A!ree,ent. S$n #+!(3 )t sued LA seen! seen! da,a!es to the tune of S@0 ,llon for rendern! an n"orre"t le!al opnon. T!& T!& #+!(3 )n parallel# Celltone also ntated an ar+traton "la, under the )ndaEUG lateral )nest,ent Treat: a!anst the -oern,ent of )nda# on the !round that the a"ton of "an"ellaton of the l"en"e for the Golata ,etro area a,ounted to an e7propraton of ts nest,ent n 5- tar. All three suts ere ds,ssed on ther ,erts +: the Cal"utta H!h Court. Celltone has preferred an appeal ap peal a!anst all the orders to a dson +en"h of o f the Cal"utta H!h Court. )t has de"ded to "lu+ all the appeals and hear the, n a "o,poste fashon.



SUMMAR OF PLEADINGS

).

TH= ) NC)=NT UUN)N- TH= L=TT= 6 =TT= 6 ) NT=NT A*UNT= T A 6AUUL=NT =ACH 6 TH= AA.

)t s su+,tted that the sale of shares to Celltone a,ounted to a fraudulent +rea"h of the AA. %irst # the Lo) entered nto +eteen )nd*o+le and -roera n respe"t of sale of the R shares

s an enfor"ea+le enfor"ea+le and le!all: +ndn! "ontra"t. )t s re"o!ned re"o!ned under the Co,panes A"t A"t and s +ndn! on the partes as ell. The lo"En a!ree,ent and the e7"lust: proson ere +ndn! prosons. Ths a""eptan"e as an nd"aton of the ntent to "reate le!al relatons and the Lo) s therefore# +ndn!. Second # the ds"losure of the Lo) as as ,ade aala+le to the professonals en!a!ed +: Celltone dd not a,ount to a far and true ds"losure. *ere referen"e to a sour"e of do"u,ent does not ,eet the standards for a far ds"losure. 6urther# the arrantes and representatons of the eller are not affe"ted +: the opportunt: of due dl! dl!en en"e "e prod proded ed to the pur"ha pur"hase ser. r. Third, ths ths as fraudule fraudulent nt ,srepr ,srepresen esentat taton. on. The nfor nfor,a ,at ton on a+out a+out en"u,+ en"u,+ran ran"es "es on the the shares shares as as suppr suppress essed ed## h"h h"h a,oun a,ounte ted d to a su!!eston of falsehood n relaton to free transfera+lt: of shares. Celltone operated on !ood fath on the representatons of 5- tar# and a "la, for +rea"h of the sa,e "an +e sustaned n the "urrent "r"u,stan"es. Hen"e# the n"dents surroundn! the Lo) "onsttute a fraudulent +rea"h of the AA.s



)).

TH= ) NC)=NT UUN)N- TH= CALCUTTA L)C=N= CNT)TUT= =ACH 6 TH= AA

)t s su+,tted that the n"dents surroundn! the Cal"utta l"ense "onsttute a +rea"h of Clause %.D of the AA. The a"tons of 5- tar a,ount to +r+er: under the Preenton of Corrupton Corrupton A"t 1$$. %irst # !ratf"aton as pad to a pu+l" serant. Althou!h Althou!h the pa:,ent as ,ade to a "onsultan": fr,# the re"ept of ,one: +: the fr, should +e treated as the re"ept of ,one: +: the nddual. Ths s +e"ause he as the sole +enef"ar: n "ontrol of the fr,# and the fr, as used to ,as re"ept of ths ,one:. Second # ths !ratf"aton !ratf"aton as lle!al re,uneraton. *r. e+ara:a as a ,e,+er of the tender "o,,ttee# and dd not ds"lose re"ept of ths a,ount fro, an nterested part:. part:. Ths s "learl: n olaton of tender !udelnes and nd"ate of the ntent of *r. e+ara:a. Third # ths lle!al !ratf"aton as n respe"t of an off"al a"t. Therefore# 5- tar as noled n +r+er:. The re"ept of ,one: +: *r. e+ara:a pla"es h, n a "onfl"t of nterest th re!ards to the pe"unar: pe"unar : nterests of the -oern,ent. These a"tons of the fr, nted the de"son of the Cal"utta H!h Court h"h Juashed the l"enses. The a+lt: of the +usness to "ondu"t tself as "onte,plated to +e "ondu"ted as seerel: ha,pered +: ths san"ton. Hen"e# t s su+,tted that the a"tons of the respondents n ths ,atter a,ount to a +rea"h of the AA. ))).

TH= ) NC)=NT UUN)N- TH= APU CNT)TUT= 6AUUL=NT *)=P==NTAT)N

)t s su+,tted that the 5- tar suppled Celltone th an n"orre"t proft proBe"ton to ndu"e the, nto entern! the "ontra"t. %irst # the ntal f!ure of s.250 as proded +: 5- tar# no non n! ! t to +e fals false. e. Th Thee "lar "larf f" "at ato on n offe offere red d +: the, the, dur durn! n! due due dl dl!e !en" n"ee as as n"o, n"o,ple plete te## spe"ul spe"ulat ate e and and fale faled d to prod prodee the the "o,ple "o,plete te p"t p"ture ure.. Th Ther erefo efore# re# ths ths "larf"aton fals to ,eet the standard of ds"losure and should not +e "onsdered. Second # ths as fraudulent ,srepresentaton. The ntal proBe"ton as suppled re"lessl: +: the 5- tar n order to present a false ,a!e a+out the profta+lt: of the +usness. There ere no reasona+le !rounds for +elen! ths proBe"ton to +e true. Celltone had reled on ths proBe"ton and t nfluen"ed ts de"son to enter nto the "ontra"t. Therefore# the re"less su!!eston of the untrue fa"t ndu"ed the, to enter the a!ree,ent# and t s su+,tted that the false proBe"ton a,ounts to fraudulent ,srepresentaton. )>. TH= A*A-= CLA)*= HUL = A4A= MEMORIAL FOR THE FOR THE APPELLANTPAGE 16


)t s su+,tted that the da,a!es "la,ed +: Celltone should +e aarded n full. )n the a+sen"e of these fraudulent ,srepresentatons# Celltone ould not hae entered nto the "ontra"t at all. The da,a!es should +e "al"ulated on a Qno transa"ton? +ass# and t should +e enttled to +e put nto the poston t ould hae +een had these representatons not +een ,ade. Hen"e# t s su+,tted that the da,a!es "la,ed should +e aarded n full. >. AN ANG ) L)-AT= T  =L=A= =L=A= TH= =C4 A*UNT. )t s su+,tted that the an s +ound to release the es"ro a,ount as the nde,nf"aton o+l!aton has +een tr!!ered. %irst # there as a +rea"h of arrant: h"h tr!!ered the nde,nf"aton o+l!aton. Second # da,a!es hae +een "aused due to the +rea"h. The nde,nf"aton o+l!atons "oered Qan: and all da,a!es? suffered. Ths n"ludes the fall n aluaton# !oodll# attorne: fees and other e7penses. Third # the es"ro a!ent s +ound to follo the nstru"tons of the es"ro a!ree,ent. The a!ree,ent "learl: stpulated that nde,nf"aton o+l!atons ould +e tr!!ered n the eent of an: +rea"h of arrant: +: )nd*o+le or 5- tar. n"e the +rea"h has o""urred# and da,a!es hae +een suffered follon! fro, the +rea"h# the es"ro a!ent s +ound to release the a,ount. Hen"e# and an s o+l!ated to release the es"ro a,ount. >). LA ) L)AL= T PAI A*A-= 6   =N=)N=N=)N- AN ) NC=CT P)N)N. )t s su+,tted that LA s la+le to pa: da,a!es as "la,ed +: Celltone. %irst # the opnon rendered as n"orre"t and a,ounts to ne!l!ent ,srepresentaton. LA n"orre"tl: stated that the e7e"uton# deler: and perfor,an"e of the AA ould not +rea"h the ter,s and "ondt "ondton onss of a "ontr "ontra" a"t. t. Th Ths s a,oun a,ounts ts to ne!l ne!l!en !entt ,sre ,srepre presen sentat taton on sn"e sn"e LA LA had noled!e of the Lo) and the enfor"ea+le lo"En "lause theren. 6urther# ts opnon as +ased on erroneous assu,ptons. LA had a dut: to nest!ate the "r"u,stan"es +efore rendern! an opnon and therefore a passe falure to no the fa"ts does not e7"use ts la+lt:. Second # Celltone has a r!ht to sue LA for rendern! an n"orre"t opnon sn"e t had superor noled!e of fa"ts h"h shaped ts opnon. 6urther# LA ne ne that Celltone Celltone ould pla"e relan"e on ts opnon# h"h n turn "reated a dut: of "are toards Celltone. Cellto tone ne??s due due dl dl!e !en" n"ee does does not not pre" pre"lu lude de ts ts "la "la, , a!a a!ans nstt LA LA as ts ts on on Third # Cell nest!aton does not ,pl: nonErelan"e on the opnon letter. Celltone pla"ed relan"e on the ne!l!ent ,srepresentaton of LA and suffered da,a!es due to su"h relan"e. These da,a!es ,ust therefore put Celltone n the sa,e poston as t ould hae +een had there MEMORIAL FOR THE FOR THE APPELLANTPAGE 17


+een no ,srepresentaton. The da,a!es therefore# the refore# should shou ld +e "al"ulated "a l"ulated on a Qno transa"ton? +ass ,an! LA la+le to pa: da,a!es n full. >)). TH= ACT 6 TH= ->=N*=NT A*UNT T =PP)AT)N

AN N AN N A NT)

A)TAT)N ) N8UNCT)N HUL = =NT=TA)N=. )t s su+,tted that there s a pr,a fa"e "ase for e7propraton of the assets of Celltone and therefore# therefore# no antEsut nBun"ton nBun"ton should +e !ranted. %irst # the Celltone satsfes the defnton of nestor under the )ndaEUG lateral )nest,ent Treat:# and ther pur"hase of shares a,ounts to an nest,ent. Second # the reo"aton of the Cal"utta l"enses depres Celltone of the use# alue and enBo:,ent of ts nest,ent. e!ulator: a"ton of ths sort has routnel: +een held to +e e7propraton. e7 propraton. Third # sn"e a pr,a fa"e le!t,ate le!t,ate "ase for e7propraton has +een esta+lshed# and the o+Be"ts of the ar+traton dspute and the "urrent pro"eedn!s are "o,pletel: dor"ed# the pro"eedn!s should +e alloed to "ontnue as s. Hen"e# t s su+,tted that sn"e a pr,a fa"e "ase for e7propraton e7sts# no antEsut nBun"ton should +e entertaned.



PLEADINGS

I.

THE INCIDENTS SURROUNDING

THE LOI

FRAUDULENT BREACH

AMOUNTED

TO A

OF THE SAA

1. )t s su+,tte su+,tted d that the sale of R shares shares +: the >endor >endor Co,pan: Co,pan: )nd*o+ )nd*o+le le to Celltone Celltone s patentl: lle!al. %irst # the the Lo Lo)) as as enfor" enfor"ea ea+le +le and le!al le!all: l: ald ald 6A3 Second, 5- tar?s ds"losure as neffe"te and Celltone?s noled!e dd not restr"t a "la, for +rea"h of arr arran ant: t: 6B3 )n an: an: een eent# t# the the repr repres esen enta tat ton on n the the AA AA a,ou a,ount nted ed to frau fraudu dule lent nt ,srepresentaton 6C3 ;A<. TH= L) 4A 4A = N6C=AL= AN L=-ALLI >AL)



2. )t s su+, su+,tt tted ed that the "lause "lause n the Lo) that restr"te restr"ted d transfe transferr of ale ale hares hares to an: thrd part: s ald and le!all: enfor"ea+le.1 estr"tons on transfera+lt: of shares of a pu+l" "o,pan: "o,pan: n prate prate a!ree, a!ree,ent entss are per,s per,ss+ s+le le "ontra "ontra"tua "tuall arran! arran!e,e e,ents nts +etee +eteen n shareholders# een f the "la, s unenfor"ea+le a!anst the Co,pan:.2 3. )t s further su+,tted that t he Lo) as enfor"ea+le enfor"ea+le and le!all: le!all: +ndn! on +oth +oth partes. )t s settled la that an Lo) ,a: +e "onstrued as a letter of a""eptan"e dependn! on fa"tors su"h as ntenton of the partes# the nature of the transa"ton and the lan!ua!e e,plo:ed n the a!ree,ent.3 The onus of de,onstratn! a la" of ntenton to "reate le!al relatons les on the part: assertn! t and s a hea: +urden to ds"har!e.@ @. The Lo) n ths "ase left no essenta essentall ter,s ter,s un"erta un"ertan n or undeter, undeter,ned ned..5 ne of the preE reJustes reJustes for a "ontra"t to +e +ndn! s an a!reed pr"e% thout h"h an a!ree,ent "an +e rendered a!ue. )n ths "ase# the partes ere uneJuo"all: n a!ree,ent on the pur"hase "onsderaton "onsd eraton as ell as the nu,+er of shares shar es sou!ht to +e + e pur"hased.D The AoA of the Co,pan: too# as to +e a,ended to refle"t the sa,e a!ree,ent h"h nd"ates the "lear ntenton ntenton of the partes to +e le!all: +ound. )t s therefore su+,tted that the Lo) s an enfor"ea+le prel,nar: "ontra"t here+: the partes s,pl: desred a ,ore ela+orate for,alaton of the a!ree,ent.$ 1 e"ton 5$(2&# Co,panes A"t# 2013. 2ussell . Northern an eelop,ent Corporaton# ;12< 1 4L 5$$V e"ton 202#  =LA4A= -=N=AL CPAT)N LA4V =dard P. 4el"h# Andre 8. Ture:n K o+ert . aunders , %olk on the &elaware 'eneral Ior Aspen Pu+lshers# 200%& Corporation !aw (5th edn.# Ne Ior

3 *ulla# ) N)AN CNTACT AN P=C)6)C  =L)=6 =L)=6 ACT# 31DE31$ (13th edn.# 2012&. @ =dards . :a:s Ltd.# ;1%@< 1 4L 3@. 5 Loftus . o+erts# 1$ T.L.. T.L.. 532. % Courtne: K 6ar+arn Ltd.  Tolan ros (Hotels& Ltd ;1D5< 1 All = D1%. D resser and .A. . */s. ndal A!ro Che,"al Ltd. K Another# A) 200% C $D1. 8 Tea"hers )nsuran"e and Annut: Asso"aton of A,er"a . Tr+une Co.# %D0 6. upp. @1 (..N.I. 1$D& ;Teachers<.



5. 6urther,ore# 6urther,ore# the "ondton restr"tn! restr"tn! the sale or transfer of the shares to an: thrd part: s an nte!ral part of the hole understandn!# +ased on h"h the -roera had s!ned the a!ree,ent. =en the "lause that The parties shall negotiate in good faith  s a funda,ental part of the hole a!ree,ent a!r ee,ent and for,s part of o f the "onsderaton for -roera assentn! assentn ! to the a!ree, a!ree,ent ent.. n"e n"e the the lo"E lo"Eout out perod perod as as onl: onl: for for a spe" spe"fe fed d perod perod for for h"h h"h the restr"ton restr"ton lasted# there as no hndran"e to ts enfor"ea+lt: enfor"ea+lt:..10 Ths e7"lust: or noEshop proson n tself "onsttutes a separate +ndn! proson.11 =en the lo"En a!ree,ent han! +een for a spe"fed perod of 3 ,onths as therefore enfor"ea+le# as t rendered "ertant: as to the perod thn h"h ne!otatons ne!otatons ere to +e "on"luded.12 The prosons prosons n the a!ree,ent# therefore# o+l!ated the partes to atte,pt n !ood fath to rea"h a fnal and for,al a!ree,ent a!ree,ent13. The Lo) s enfor"ea+le as a ,utuall: +ndn! +ndn! o+l!aton to ne!otate n !ood fath.1@ Ths o+l!aton# n turn# ,pled that the a!reed shares "ould not +e transferred transferred to an:one thn the spe"fed lo"En perod. %. )t s further su+,tted that the ,ere ,ere fa"t that the partes "onte,plated "onte,plated that the Lo) ould +e superseded +: a ,ore for,al a!ree,ent and +: future ne!otatons#15 does not preent t fro, tan! effe"t as a "ontra"t1% )t s for the partes to de"de de"de at hat sta!e the: sh sh to +e  F Append7 C# 6a"tsheet. 10 4alford And thers . *les# ;12< 2 AC 12$ (HL& ;1alford 
11 8effre: 4. er,an# U= )L)-=NC= AN TH= U)N= TANACT)N -=TT)N- A =AL N=# 1D0 (2013&. 12 1alford # ;12< 2 AC 12$. 13 )te Corp . Ch"a!o Aeral )ndustres# )n".# 2@$ A.2d %25 (el. 1%$& 14 Channel Ho,e Centers . -ross,an# D5 6.2d 21 (3d Cr. 1$%&V LL* . *arne *dland ealt: Credt Corp.# D$ 6.upp. %5D# %%0 (=.. Pa. 12&.

15 Art. 2.1@.# UN))T Prn"ples. =L)=6 ACT# 31DE31$( 13th edn.# 2012&. 1% *ulla# ) N)AN CNTACT AN P=C)6)C  =L)=6



"ontra"tuall: "ontra"tuall: +ound.1D )n the present "ase# the Lo) "arred no "lause ,an! the "on"luson "on"luson of the "ontra"t n"u,+ent upon the for,all: dran do"u,ent. All the +as" and essental ter,s had +een !en an unJualfed a""eptan"e# th the ntenton to treat the sa,e as a "on"luded "ontra"t.1$ Therefore# defnte do"u,entaton as a ,ere e7tenson to the alread: de"ded "ontra"tual a!ree,ent and the la" of for,alt: does not naldate the Lo).1 )t s,pl: represented the desre of the partes as to the ,anner n h"h the preousl: a!reed transa"ton ll n fa"t pro"eed. pr o"eed.20 D. Hen"e# t s su+,tted su+,tted that the Lo) as le!al and +ndn!. ;C<. 5- TA TA ? )CLU= 4A ) N=66=CT)>= AN C=LLTN=? GN4L=-= ) NT ) NT  =T)CT =ACH 6 4AANTI =T)CT A CLA)* 6  $. )t s ell ell esta+ls esta+lshed hed that n the a+sen"e a+sen"e of a "ontra"t "ontra"tual ual stpulato stpulaton n an: ds"losure ds"losure to +e effe"te for the purpose of Jualf:n! arrantes# ould reJure to +e far and suff"entl: detaled to effe"tel: +rn! the potental +rea"h of arrant: to the pur"haser?s attenton21 and ,ere referen"e to a sour"e nfor,aton ll not satsf: the reJure,ents of a far ds"losure.22 Therefo Therefore# re# t s su+, su+,tte tted d that ,erel: prodn! prodn! the Lo) thout thout a"tuall: a"tuall: pontn! out ts +ndn! nature as not spe"f" enou!h and does not a,ount to a far and effe"te ds"losure so as to Jualf: the arrantes ,ade n the AA. . 6urther,ore# 6urther,ore# n the a+sen"e of an e7press sandE+a!!n! sandE+a!!n! proson# Courts hae held that n "ases here the a!ree,ent of sale s slent# the seller?s representatons and arrantes are unaffe"ted +: the pur"haser?s due dl!en"e.23 The seller han! oned and operated the +usness as n a +etter poston than the pur"haser to no a+out "rt"al fa"ts relatn! to 1D Pa!nan pa . 6eed Produ"ts L,ted# ;1$D< 2 Llo:d?s ep %01. 1$ Curr,+ho: and Co. Ltd. . Creet# (A) 133 PC 2.& 1 hanarlal Nara:andas *undade . The Ne *ofussl Co. Ltd. K rs.# A) 1@% PC D. 20 >on >on HatfeldtE4lden+ur! Hatfeld tE4lden+ur! . Ale7,der# Ale7,der# (112& 1 Ch 2$@. 21 Prent"e . "ottsh Poer pl".# ;1D< 2 CLC 2%@. 22 Leson . 6arn ;1D$< 2 All =.. 11@ and anel eeds Ltd. . =* = Che,sts Ltd. ;15< C.L.C. 1@05&.



the +usness3 The perod to "ondu"t due dl!en"e as l,ted n duraton thn h"h there ere nu,erous fa"tors that Celltone had to nest!ate nest!ate and erf:. erf:. As a "onseJuen"e# "onseJuen"e# t as not unu unusua suall that that Cell Cellton tonee ould ould fal fal to full: full: appre" appre"a ate te the s!nf s!nf" "an" an"ee of the the fa"ts fa"ts un"oered durn! due dl!en"e.2@ Ths +en! Celltone?s frst fora: nto the )ndan ,aret# t "an +e presu,ed that t reled on the seller?s representatons and arrantes to prode an e7tra la:er of prote"ton n the transa"ton# transa"ton# n addton to the la:er of prote"ton proded +: ts on due dl!en"e. )t s therefore su+,tted that Celltone?s "onstru"te noled!e of the Lo) should not affe"t ts a+lt: to su+seJuentl: +rn! sut for +rea"h.

;<. TH=  =P==NTAT)N =P==NTAT)N )N TH= AA A*UNT= T 6AUUL=NT *)=P==NTAT)N 10. )t s su+,tted that the representaton n the AA "onsttutes "onsttutes fraudulent fraudulent ,srepresentaton. ,srepresentaton. 6raudulent ,srepresentaton arses hen there s a su!!eston of an untrue fa"t# ether ne!l!entl: or re"lessl:# ntended to ndu"e the other part: to enter nto the "ontra"t and ths leads to da,a!es.25 )t s su+,tted that the representaton as false sn"e the respondent as not a+solutel: enttled to sell and transfer the shares due to the ter,s of the Lo)# and relan"e as pla"ed on ths for to reasons. i. S+88&$##!n 9 (&+( ":+n(# ( #+;;$#(!n 9 9")#$3 11. )t s su+, su+,tte tted d that the respondent respondentss "annot "annot tae the defense defense that ,ere slen"e does not a,ount to ,srepresentaton.2% )t s a rule of eJut:# as ell as of la# that a suppressio veri s eJualent to a suggestio falsi.2D The respondents ere "learl: aare of the +ndn!

nature of the Lo) and thus had noled!e of the falst: of ther representaton. Therefore# hen a state,ent of "lear ttle as ,ade +ut the fa"t that there as an e7stn! en"u,+ran"e

23 )nter, Health"are# )n". . pheron Corp.# $$@ A.2d 513# 5@$ (el. uper. Ct. 2005&. 2@ C )n". . MffEas Pu+lshn! Co.# 553 N.=.2d D (N.I. 10&. 25 err: . Pee# ;1$$< 1@ A.C.33D . 2% Ga,al Gant Palal . ,t Praash e Palal# A) 1D% aB D ; 2a#al < < 2D 2a#al# A) 1D% aB D. MEMORIAL FOR THE FOR THE APPELLANTPAGE 23


had rather +een suppressed# t as a suppresson suppresson of truth th a su!!eston of falsehood and hen"e# a,ounted to fraudulent ,srepresentaton.2$ !!3 !!3 In($n(!n 9 9 ( ($ P" P"&(< !# !# !:: !::" "($&!") 12. )t s further su+,tted su+,tted that the ntenton of the respondents s ,,ater ,,ateral. al.2 The ,ere fa"t that the: ,ade a representaton representaton "la,n! to hae ttle oer the shares non! t as untrue s suff"ent to proe fraudulent ,srepresentaton. ,srepresentaton. 6urther,ore# 6urther,ore# ,erel: +e"ause the ,sled part: had the opportunt: to nest!ate t s not depred depr ed of the r!ht r!h t to "la, de"epton de"ep ton and therefor thereforee a +rea"h +rea"h of arrant: arrant:..30 Th Ther eree s an o+l!a o+l!ato ton n upo upon n the part: part: upo upon n ho, ho, "onfden"e has +een reposed to ds"lose nfor,aton releant to the "ontra"t31 )nd*o+le# han! spe"al noled!e h"h as not a""ess+le to Celltone# had a dut: to ds"lose eer:thn! that ,a: hae affe"ted the latter?s Bud!,ent.32 13. Therefore# Therefore# een thou!h Celltone "ondu"ted due dl!en"e# dl!en"e# t reled on the representatons representatons ,ade n the AA on the +ass of h"h t as ndu"ed to enter nto the transa"ton th )nd*o+le )nd*o+le and 5- tar. Additionally# as a result of the +rea"h of the arrantes# t suffered da,a!es n the for, of loss of !oodll# oerpa:,ent of pur"hase "onsderaton et". Hen"e# t s su+,tted that the representaton a,ounted to fraudulent ,srepresentaton.

II.

THE INCIDENTS SURROUNDING BREACH

THE CALCUTTA LICENSE AMOUNT TO A

OF THE SAA

1@. )t s su+, su+,tte tted d that durn! durn! the pro"ess pro"ess of o+tann o+tann! ! the Cal"utta Cal"utta l"enses# l"enses# 5- tar as n olaton of an appl"a+le la and re!ulaton h"h resulted n an ad,nstrate san"ton of a ,ater ,atera all nature nature 6A 6A3 Ths n turn had a ,ateral aderse effe"t on the a+lt: of the

2$ )sler . ron# 1% N.C. %$5 (N.C. 12&. 2 Unted *otors 6nan"e Co . Addson Addson and Co.# (13D& 3 *L D0%. 30 tandard Chartered +an . Pastan hppn! Co.# ;2003< 1 All = 1D3. 31 AlEGandar .8 +ron# 1$$ 9 %%5. 32 Anson3s Anson3s !aw !aw of Contract # 301 (eatson et al # 2th edn.# 2010&. MEMORIAL FOR THE FOR THE APPELLANTPAGE 24


Co,pan: to "ondu"t ts +usness 6B. Ths a"t s attr+uta+le to 5- tar# and s a +rea"h of representatons ,ade n the AA 6C3 ;A<. TH= CNUCT 6 ) N*)L= AN 5- TA TA 4A 4A  )N >)LAT)N 6 LA4

15. )t s su+, su+,tt tted ed that that 5- tar tar "o,, "o,,tt tted ed +r+er +r+er: : und under er the the PCA PCA.. Th Ths s s +e"au +e"ause se the the pa:,ents to *r. e+ara:a?s Co,pan: Co,pan : ere !ratf"aton to a pu+l" serant 6!# other than le!al re,uneraton 6!! and ths as n respe"t of an off"al a"t 6!!!. !3 T$ 8"<:$n( 8"<:$n( ":+n($ ":+n($ ( " ;&"(!9!"(!n ( ( " 8+')! #$&="n(

1%. )t s su+,tted that the pa:,ent ,ade to *r. e+ara:a?s e+ara:a?s "o,pan:# "o,pan:# should +e "onstrued as han! +een to *r. e+ara:a. *r. e+ara:a as a pu+l" serant under e"ton 21 of the )ndan Penal Code# as he as an officer entitled to #ake assess#ents on pecuniary #atters .33 Althou!h the "onsultan": "o,pan: s a separate le!al entt:# entt:# relating to the 'overn#ent . the "orporate el "an +e per"ed n "ases here the co#pany serves as a fa4ade to obfuscate identity.3@ )n the nstant "ase# the threefold test for ths as set out n Trustor A(56

has +een ,et. %irst # the nddual as n "ontrol. Second # the "o,pan: as used to "on"eal re"ept or aod la+lt:. Third # t s n the nterests of Bust"e. 1D. %irst # the nddual as n "ontrol of the "o,pan:. *r. e+ara:a alon! th hs fe full: oned the "onsultn! "o,pan:3%# and as the Q sole beneficial benefic ial shareholder3 .3D Thus# he had +oth de facto and de 7ure "ontrol of the "o,pan:.3$ )n an: "ase# he as the Qdirecting #ind and will ? of hs "o,pan:# and the a"tons of hs "o,pan: "an +e attr+uted to h,.3 )n l!ht

of ths attr+uton# hs transa"tons nd"ate non! re"ept of the ,one:. 33 e". 21# ) N)AN P=NAL C=# 1$%0. 3@ 8ones . Lp,an# 1%2 1 4L $32V -en"or ACP Ltd . al+:# al+:# 2000 2 CLC D3@. 35 Trustor A . ,all+one (no 2&# 2001 1 4L 11DD. 3% F10# 6a"tsheet. 3D Aeln! Aeln! arford . Peron# 1$ 5 CC %DD ; +erion<. Taeoers& e!ulatons# 2011. 3$ e! 2(1&(e&# =) (u+stantal A"Justons of hares and Taeoers&



1$. Second # the "o,pan: as used to "on"eal re"ept fro, the prn"pal. )t s su+,tted that *r. e+ara:a used the "o,pan: as a Qvehicle? to hde re"ept. As per the C>C -udelnes on Tenders#@0 *r. e+ara:a should hae ds"losed ths "onfl"t of nterest to the -oern,ent# h"h ould hae led to hs re,oal fro, the tender "o,,ttee. 6alure to do so s an Qi#proper use of the corporate structure. ?@1 1. Third # per"n! the el s n the nterests of Bust"e. *r. e+ara:a as en!a!ed n the a+use of a "orporate stru"ture to the detr,ent of the -oern,ent. )n ths "ase# *r. e+ara:a?s dealn!s th 5- tar rase a presu,pton of +as@2 n the tender dealn!s# h"h as "onfr,ed +: the de"son of the Cal"utta H!h Court.@3 )n l!ht of ths +as n pu+l" dealn!s# the "orporate el ,ust +e per"ed to esta+lsh esta+lsh the dentt: of *r. e+ara:a e+ara:a as the re"pent of ,one:.@@ !!3 T$ 8"<:$n( ! n( ":+n( ( " )$;") &$:+n$&"(!n &$:+n$&"(!n

20. *r. e+ara:a as a ,e,+er ,e,+er of the tender "o,,ttee@5 h"h as respons+le for aardn! l"enses for the 5- ,o+le netors. *e,+ers of tender "o,,ttees oe a fdu"ar: dut: to the -oern,ent@%# and an: poss+le "onfl"t that ,a: lead to su+Eopt,al allo"aton of resour"es s a +etra:al of su"h dut:. Therefore# an: re,uneraton re"eed +: a pu+l"

3 )rdu, )nda Tele"o, Ltd. . *otorola )n"orporated and rs.# 2011 1 CC D@V Tes"o uper,arets Ltd . Nattrass# 1D1 2 4L 11%%. 11%%.

@0 C>C rder no. D1/12/05 dated /12/2005. @1 Peron# 1$ 5 CC %DD. @2 *.P. 8an K .N. 8an# P)NC)PL= 6 A*)N)TAT)>= LA4# 5@2 (1Dth edn.# 2003&. @3 F12# 6a"tsheet. @@ -lford *otor Co . Horne# 133 Ch 35. @5 F10# 6a"tsheet. @% Centre for Pu+l" )nterest Lt!aton . Unon of )nda# 2012 )ndla =L D@. MEMORIAL FOR THE FOR THE APPELLANTPAGE 26


serant fro, an nterested part: n the tender pro"eedn!s# thout ds"losure of the sa,e to the -oern,ent# s lle!al. !!!3 !!!3

T$$ ;&"( T ;&"(!9 !9! !"( "(! !n n *"# *"# !n &$#8 &$#8$ $(( 9 9 "n "n 99 99! !!" !")) "( "(

21. 6nall: 6nall:## t s su+, su+,tte tted d that the re"ept re"ept of ths ths ,one: ,one: pla"es pla"es *r. e+ara:a e+ara:a n a stuat stuaton on here there s a poss+le "onfl"t of nterest. The defen"e of the "onsultan": ser"es proded +en! le!t,ate s e7"luded +: the de"son of the Cal"utta H!h Court. Ths assu,pton of +as nd"ates a potental "onfl"t of nterest.@D 22. The Jueston of hether *r. e+ara:a a"tuall: a"tuall: nfluen"ed tender pro"eedn!s pro"eedn!s or had the ntenton to do so n 5- tar?s faour s rreleant as  if the intention or ob7ect with which #oney is offered to a public servant is to induce hi# to perfor# an official act to show favor in the e$ercise of his official function, the offence would be co#plete .@$ )n the nstant "ase#

the fndn! of presu,pton of +as +: the Cal"utta H!h Court as ell as the "on"eal,ent of ths a,ount +: *r. e+ara:a suff"entl: esta+lshes the reJured ntenton.

;< TH= >)LAT)N 6 TH= LA4 L= T AN A*)N)TAT)>= ANCT)N 4H)CH HA A *AT=)AL )*PACT.

23. The Cal"utta l"ense l"ense as "an"elled after a reelaton of the ne7us +eteen *r. e+ara:a e+ara:a and 5- tar +: a de"son of the Cal"utta H!h Court. )t s su+,tted that the "an"ellaton of a l"ense a,ounts to ad,nstrate a"ton#@ and ths s lel: to lead to a ,ateral aderse effe"t. 2@. The "lause "lause n the AA reads reads Qlikely to result in an ad#inistrative sanction of a #aterial Ther erefo efore# re# t s adeJu adeJuate ate to proe proe that that on the the +alan +alan"e "e of pro+a pro+a+ +lt lte es# s# the the nature?.50Th

@D C>C rder no. D1/12/05# dated /12/2005. @$ *ohadeo aunappa -una . tate# A) 152 o, @35. 1rongful Acts # ) NT=NAT)NAL NT=NAT)NAL @ Art. @# @# Articles on Responsibility of States for nternationally 1rongful

C**))N# (Noe,+er 2001&.

50 Cl. %.D# Append7 A# 6a"tsheet. MEMORIAL FOR THE FOR THE APPELLANTPAGE 27

LA4


ad,nstrate san"ton s lel: to lead to a ,ateral aderse effe"t on the a+lt: of the "o,pan: n a reasona+le ,an?s poston to "ontnue ts +usness. 25. )t s su+,tted that the "an"ellaton "an"ellaton of the l"ense l"ense ,eans the loss of a s!nf"ant s!nf"ant sour"e of reenue# h"h s ,ateral and per,anent# and therefore# a ,ateral aderse effe"t to the fun"tonn! of the "o,pan: as ensa!ed at the t,e of the a!ree,ent. )t has +een stated that n "o,,er"al a!ree,ents# a!ree,ents# the loss of a s!nf"ant sour"e of reenue s suff"ent to s!nf: a ,ateral aderse effe"t.51 Hen"e# t s su+,tted that there s a loss of the a+lt: to "ondu"t +usness n Cal"utta and hen"e the ,ateral aderse ,pa"t s a dre"t result of the ad,nstrate san"ton. ;C< TH) ) ATT)UTAL=

T TH= C*PANI AN TH=I CAN = H=L L)AL= 6 TH= 6 TH= A*= .

2%. )t s su+, su+,tt tted ed that the a"ton a"tonss and #ens rea of *r. antha an!a# n addton to the pa:,ent of the th e ,one: to *r. e+ara:a "an +e attr+uted a ttr+uted to 5- tar. u"h a"tons "onsttute "on sttute a +rea"h of arrant: n the AA and render the, a+ettors of +r+er: under e"ton 10 of the )ndan Penal Code. 2D. The ,one: pad to *r. *r. e+ara:a as pad out of the a""ounts of 5- tar# and therefore# "an +e easl: attr+uted to 5- tar. 2$. n the ssue of the ntent of *r. antha antha an!a# the Courts hae held that the #ens rea of an e,plo:ee e,plo:ee "an +e attr+uted to the Parent Co,pan:.52 )n the nstant "ase# *r. antha an!a as a part of the "ore tea, handln! the l"ensn! pro"ess and as authored +: the Co,pan: to deal n the l"ensn! pro"ess.53 The test lad don n 0eridian68 therefore# s satsfed# h"h stated that irrespective of the person being the 9directing will and #ind ? of the co#pany, if the person was authoried by the Co#pany for a particular purpose, then his knowledge shall be attributed to the Co#pany . The sa,e prn"ple as affr,ed n

51 Car+oo edE*7K Contra"tn! Ltd . ar"elo# 11 $$1 C C. 52 >. U,aant K *. Nanadear# Corporate Cri#inal !iability and Securities -fferings" Rationaliing the ridiu#/0otorola case# 23(1& NAT)NAL LA4 CHL 6 ) N)A  =>)=4 =>)=4 10 (2011&.

53 9.# Clarf"atons. 5@ *erdu, -lo+al 6unds *ana!e,ent Ltd . e"urtes Co,,sson# 15 2 AC 500. MEMORIAL FOR THE FOR THE APPELLANTPAGE 28


ridiu#66# h"h stated that the #ens rea of persons Qentrusted with the e$ercise of powers of the Co#pany ? "ould +e attr+uted to the "o,pan:. Hen"e# the #ens rea of *r. an!a "an

+e attr+uted to 5- tar. )t s therefore su+,tted that 5- tar "o,,tted a +rea"h of arrant:.

III.

THE INCORRECT ARPU FIGURES

AMOUNT TO FRAUDULENT

MISREPRESENTATION 2. )t s su+,tted that the "o,,un"aton "o,,un"aton of the n"orre"t APU APU f!ure to Celltone a,ounts to fraud fraudule ulent nt ,sr ,srepr eprese esenta ntat ton on +: 5- tar tar and )nd*o+ )nd*o+le le for three three reason reasons. s. %irst # the "larf"aton as a!ue and nsuff"ent and should not +e "onsdered 6A. Second # the ntal proBe"ton a,ounts to fraudulent ,srepresen taton6B. ;A<. TH= CLA)6)CAT)N

6* 5-

TA 4A 4A >A-U=

AN ) NU66)C)=NT

30. )t s su+ su+, ,tt tted ed that on"e the f!ur f!uree of s.250 s.250 had +een +een provided Q provided to Celltone plc?#5% a "ontnun! "ontnun! respons+lt: for those representatons representatons "an +e ,puted to 5- tar. tar.5D The +urden to re"tf: ths proBe"ton les on 5- tar. The fa"t that no further do"u,ents re"tf:n! the APU f!ure ere sent out# een after the frustrated phone "all s nd"ate of 5- tar?s falure to fulfl ths respons+lt:. The fa"t that the phone "all ept !ettn! frustrated ,ples that t as as foreseeable that that Cell Cellto tone ne dd not o+ta o+tan n the "orre" "orre"tt nfor, nfor,at aton# on# and the the "ontnun! "ontnun! respons+lt: respons+lt: for the or!nal representaton representaton s sustaned. sustaned.5$ 6urther# the response as as a "onB "onBe" e"tu ture re and and not not refl refle" e"te ted d n an: an: nte ntern rnal al do"u do"u,e ,ent nts. s. The Cour Courtt n (ottlin nternational nvest#ents held that Q such a conveyance does not satisfy the standard of

55 )rdu, )nda Tele"o, Ltd . *otorola )n"orporated and rs.# 2011 1 CC D@. 5% F12# 6a"tsheet. 5D Casa,o LLP . >s"ount edhaen?s Trustees# 201@ CL @$@ ; :iscount <. <. 5$ :iscount # 201@ CL @$@.



disclosure?5. )n l!ht of ths respons+lt:# a fndn! on the +ass of the "larf"aton offered

durn! the phone "all "annot +e sustaned. 31. 6urther 6urther## t s su+, su+,tte tted d that Qit is not enough if the clai#ants could have discovered the truth, truth, but whether they in fact discovered discovered the truth?.%0 )n the "urrent s"enaro# Celltone had

not ds"oered the a"tual f!ure of s.1D5 untl after the "o,pleton of the deal.%1 *ere opportunt: of due dl!en"e th the other part: does not e7"lude the dut: on 5- tar to ds"lose ,ateral fa"ts. )n eepn! th ths standard of ds"losure and !eneral "orporate pra"t"e# a ds"losure letter should hae +een sent out +: 5- tar.%2 A ds"losure that s nethe netherr spe" spe"f" f" nor e7pres e7presss does does not ,eet ,eet the the stand standard ard for ds"l ds"losu osure re n share share sale sale a!ree,ents.%3 32. )n an: "ase# t s su+,tted su+,tted that the response !en +: 5- tar off"als off"als durn! the phone "all "all faled faled to prode prode an a""urate a""urate p"ture. p"ture. Ths Ths en!a!es en!a!es the rule lad don n :ahey ;8# h"h states that Qif a reply, though accurate, fails to provide a co#plete picture, it #ay be treated ?. )t s su+,tted that n the nstant "ase# the repl: to the enJur: rased n the as deceit ?. "ourse "ourse of due dl!en"e dl!en"e as a!ue a!ue and nsuff" nsuff"ent ent for to reasons. reasons. %irst # the a""urate f!ure as not proded to Celltone# as onl: a a!ue state,ent that Qthis was without regard to discounts and rebates that #ay be offered ?%5 as ,ade. Not onl: s ths state,ent

spe"ulate spe"ulate n nature# on! to the "onstru"ton of the ord Q#ay?# +ut also does not refle"t 5 ottn )nternatonal )nest,ents Ltd . >enson >enson -roup PLC# P LC# 200% =4HC 3112. ; (ottin<

%0 ed!rae . Hurd# 1$$1 20 Ch. .V Leson . 6arn# 1D$ 2 ALL = 11@.

%1 F12# 6a"tsheet.

%2 . aer# . 8llson#  U= )L)-=NC=# )CLU= AN 4AANT)= )N PACT)C= (12&.

%3 Ne Hearts . Cos,opoltan )nest,ents Ltd# 1D 2 CLC 2@. %@ >ahe: . Gen:on# 2013 =4CA C %5$. %5 F12# 6a"tsheet. MEMORIAL FOR THE FOR THE APPELLANTPAGE 30

TH=

CPAT= AC9U))T)N


the a,ount of redu"ton n profta+lt:. Second # n a "orporate deal noln! lar!e a,ounts of ,one:# no atte,pt as ,ade to re"tf: the or!nal do"u,ent h"h as sent out. The Qwarranted representation?# therefore# re,ans the ntal representaton of s. 250 h"h as Q provided provided by 6' Star ? and the "one:an"e +: 5- tar off"als faled to prode the "o,plete p"ture# and s sJuarel: nsuff"ent. ;<. TH= ) N)T)AL P8=CT)N A*UNT T 6AUUL=NT *)=P==NTAT)N.

33. )t s su+,tted that the proBe"tons proBe"tons ere fraudulent ,srepresentat ,srepresentatons ons as the: satsf: the test lad don n RC Thakkar ;; . %irst # there as a re"less su!!eston su!!eston of an untrue fa"t. Second # t as ,ade th the ntent to de"ee or to ndu"e the other part: to enter nto the "ontra"t. "ontra"t. Third, relan"e as pla"ed on t. 3@. %irst, t s su+,tted that the ntal APU proBe"ton as suppled re"lessl: thout +elef

n ts ts trut truth. h. The nt nta all proB proBe" e"t ton on s, s,pl: pl: ser sered ed to pro prod dee Cell Cellto tone ne th th a false Qfalse and there therefor foree "onst "onsttu tute te false false reass reassura urance ncess about about the prof profita itabil bility ity of the busine business3 ss3 # and stat state, e,en ents ts as Q general general i#pression created by the state#ent is false, even though co#ponents of the state#ent #ay be true ?.%D 35. )t s su+,tted that 5- tar had no reasona+le !round !round to +elee ths state,ent to +e true.

The proBe"ton as ,ade th the noled!e that ds"ounts ould +e offered.%$ NonE ds"losure of the e7sten"e of ds"ounts s Qe
Q false The es"alated proBe"ton pants a +etter false i#age about the profitability of the business .? The p"ture a+out the th e profta+lt: prof ta+lt: of o f 5- tar than t a"tuall: a"tu all: s. Ths ould sere onl: to ent"e

%% C Thaar . -uBarat H- oard# A) 1D3 -uB 3@. %D Aaron eefs ltd . Tss# 1$% AC 2D3V (ottin# 200% =4HC 3112. %$ F12# 6a"tsheet. % e". 1%1(+&# A,er"an estate,ent 2d. MEMORIAL FOR THE FOR THE APPELLANTPAGE 31


Celltone to nest n the deal. )n an: "ase# t s no Bustf"aton that ths representaton as ,ade thout a +ad ,ote#D0 or that there as no ntenton to "heat or "ause loss.D1 3D. Third, Celltone pro"eeded on the ntal proBe"tonD2 untl the: ne of the real f!ure# h"h as after "o,pleton of the deal. The false a""ount of the profta+lt: of the +usness therefore# as n the ,nds of Celltone pl" hen the: entered the deal.D3 Hen"e t s su+,tted that there e7sts a "ausal ln +eteen the profta+lt: of the "o,pan: and the de"son to nest n t# h"h s adeJuate to ,eet the standard for relan"e.D@ Therefore# t s su+,tted that the a"tons of the respondents a,ount to fraudulent ,srepresentaton.

IV.

THE DAMAGES CLAIMED

SHOULD BE AWARDED

3$. )t s su+ su+, ,tt tted ed that that the the da,a! da,a!es es "la, "la,ed ed +: the the appel appella lant ntss n respe" respe"tt of the +rea"h +rea"h of arrant: should +e aarded n full. )n &owns#D5 t as held that n "ases noln! fraud# da,a!es should +e "al"ulated on a Qno transaction transaction? +ass. )n the nstant "ase# f the fraudulent ,srepresentatons had not +een ,ade# the appellants ould not hae !one throu!h th the transa"ton. Ths s "lear fro, ther relan"e on the state,ents ,ade +: the respondents# respondents# as su+,tted su+,tted a+oe. The appellants appellants ,ade the entre nest,ent nest,ent th the +elef that Qthe process was above board3 =; # Qthe shares were transferable?DD and that the: ere not Qconsid rule lad do don n S#ith considerab erably ly overpa overpayin ying g for their their stock stock ?D$. The rul S#ith >ew Court Court

D0 Unted *otor fnan"e Co . Addson Addson K Co.# A) 13D PC 21. D1 ron 8ennson K Co . Per": alton# ;15D< 2 All = $@@. D2 F12# 6a"tsheet. D3 (ottin, PLC# ;200%< =4HC 3112. D@ rstol K 4est uldn! o"et: . *othe# 1D 2 4L @3%. D5 ons . Chappell# ;1D< 1 4L @2%. D% F5# 6a"tsheet. DD Append7 A# 6a"tsheet. MEMORIAL FOR THE FOR THE APPELLANTPAGE 32


"onsderaton should +e aarded as Securities=? should +e folloed# and the entre pur"hase "onsderaton da,a!es. 3. )t s su+,tted that the appellants appellants are enttled enttled to +e put nto the poston the: ould hae +een had those representatons repres entatons not +een ,ade.$0 )n the nstant "ase# the entre nest,ent nest,ent of S@0 ,llon ould not hae +een ,ade n the a+sen"e of fraud. Therefore# the da,a!es "la,ed +: the appellants are "orre"t and should +e aarded to the,.

V.

BAND BANK IS OBLIGATED

TO RELEASE THE ESCROW AMOUNT

@0. )t s su+,tted that and an ,ust release the es"ro a,ount a,ount +e"ause the nde,nf"aton nde,nf"aton o+l!aton has arsen due to +rea"h of arrant:# ,srepresentaton et" 6A. a,a!e has +een "aused due to su"h a +rea"h 6BV and "onseJuentl:# "onseJuentl:# the the es"ro a!ent s +ound to follo the nstru"tons n the es"ro a!ree,ent 6C.

;A<. ) N=*N)6)CAT)N N=*N)6)CAT)N L)-AT)N HA ==N T)--==

@1. @1. Th Thee es"r es"ro o a,ou a,ount nt as as Qto be applied applied toward towardss satisfa satisfacti ction on of any inde#n inde#nific ificati ation on obligations of nd0obile and 6' Star that #ay arise under the SAA. ?$1 As su+,tted a+oe#

there has +een a +rea"h of arrant: and thus the nde,nf"aton o+l!aton o+l!aton of respondents respondents has +een tr!!ered.

D$ F12# 6a"tsheet. 79 ,th Ne Court e"urtes Ltd . Ct+an NA# ;1D< AC 25@.

80 )nerte" . e *ol Holdn! P# ;200< =4HC 2@D1.

$1 F# 6a"tsheet. MEMORIAL FOR THE FOR THE APPELLANTPAGE 33


;<. A*A-= HA ==N CAU= U= T UCH A =ACH @2. The r!hts of the nde,nt: holder holder e7tend +e:ond e"ton 125 of the )ndan Contra"t A"t. A"t.$2 Thus# here da,a!es hae +een suffered or a reasona+le "la, has +een ,ade h"h shos that an a+solute la+lt: has +een n"urred +: the nde,nt: holder# t s enttled to +e nde,nfed.$3 @3. )t s su+ su+, ,tt tted ed that that )nd*o+ )nd*o+le le und under ertoo too  to nde, nde,nf nf: : the the pett petton oner er for Qany and all da#ages? suffered +: the pettoner# resultn! fro, or "onseJuent upon or relatn! to su"h a

+rea"h of representaton# represent aton# arrant: et al .$@ @@. As su+,tted su+,tted a+oe# the Cellton Celltonee has oerEpad oerEpad the "onsder "onsderat aton on due to the fraudulent fraudulent ,srepresentaton ,ade +: 5- tar. )t has also suffered da,a!e to ts !oodll on! to the n"dents n"dents surroundn! surroundn! the Cal"utta Cal"utta l"ense.$5 Additionally# Celltone s also enttled to "la, the attorne: fees and e7penses n"urred n esta+lshn! ts r!ht to nde,nt: sn"e t has +een spe"f"all: +een n"luded n the nde,nf"aton "lause.$% Therefore# t s su+,tted that Celltone has suffered da,a!es resultn! fro, the +rea"h of arrant:# representatons et".

;C<. TH= =C4 A-=NT ) UN T 6LL4 TH= ) NTUCT)N )N TH= =C4 A-==*=NT

@5. )t s su+,tted that the es"ro a!ree,ent a!ree,ent "reates a l,ted a!en": n and an heren heren the es"ro holder s o+l!ated to a"t str"tl: n a""ordan"e th the es"ro nstru"tons !en +: that part:.$D Thus# t s su+,tted that sn"e there has +een a +rea"h of arrant: h"h has resulted n da,a!es to the appellants# the +an s +ound to release the es"ro a,ount. $2 -aBanan *oreshar Parelar . *oreshar *adan# A) 1@2 * @@. $38et Ara:s ()nda& Ltd . ahara Arlnes Arlnes Ltd K rs# A) 2011 * D3@. $@ Cl. 10.1# 10.1 # Append7 A# 6a"tsheet. $5 *al and *ah,ud . an of Credt # ;1D< UGHL 23. A,te"h *e"han"al er"es# ;1D< 53 Cal.App.@th 500# 50@. $% Contnental Heller . A,te"h



VI.

DLA

DAMAGES FOR RENDERING AN INCORRECT IS LIABLE TO PAY D OPINION

@%. )t s su+, su+,tte tted d that that LA s la+le to pa: da,a!es to the tune of S@0 ,llon ,llon sn"e t has rendered an n"orre"t opnon to Celltone. Ths s on! to three reasonsV first the the opnon as n"orre"t as t a,ounts to ne!l!ent ,srepresentaton ,srepresentaton 6A3 Second, Celltone has a r!ht to sue LA for t 6B, and third, Celltone?s due dl!en"e does not pre"lude ts "la, a!anst LA 6C3

;A<. TH= P)N)N  =N== =N== I LA ) ) NC=CT )NC= )T A*UNT T N=-L)-=NT *)=P==NTAT)N. @D. )t s su+, su+,tte tted d that the opnon opnon rendered rendered +: LA s n"orre"t n"orre"t +e"ause LA n"orre" n"orre"tl: tl: stated that the e7e"uton# deler: and perfor,an"e of AA ould not +rea"h the ter,s and "ondt "ondton onss of a "ontra "ontra"t "t 6!3 LA ,erel: assu,ed the fa"ts thout nest!atn! the, properl: 6!!3 !3

DLA DLA !n !n&& &&$ $() ()< < #("( #("($ $ ("( ("( ($ ($ $>$ $>$+ +(! (!n n,, $)! $)!=$ =$&< &< "n "n 8$& 8$&9 9&: &:"n "n$ $ 9 SAA SAA *+) n( '&$" ($ ($&:# "n n!(!n# 9 " n(&"(

4?3 )t s su+,tted that at the t,e of rendern! the opnon# LA as aare of the Lo)$$ n

h"h t had "learl: +een stpulated that -roera and )nd,o+le ere lo"ed n for a perod of 3 ,onths to ne!otate n !ood fath. As su+,tted a+oe# the Lo) had the "hara"terst"s of an enfor"ea+le enfor"ea+le "ontra"t. espte han! noled!e noled!e of the fa"t that the 3 ,onths of lo"E n perod had not ended# LA n ts opnon# stated that the e7e"uton and perfor,an"e of the AA ll not +rea"h the ter,s of an: "ontra"t.$ )t s# therefore# su+,tted that ths a,ounts a,ounts to ne!l!e ne!l!ent nt ,srepr ,srepresen esentat taton on sn"e sn"e LA ,srepre ,srepresent sented ed a ,atera ,aterall fa"t fa"t to Celltone for the !udan"e of ther +usness transa"ton.?@ $D la"+urn . *"Co:# *"Co:# ;13@< 1 CA2d %@$# %5%. $$ 9.@# Clarf"atons. $ F 3(+&# Append7 # 6a"tsheet. < 0 *ehaff:# der# 4ndhol K 4lson . Central an ener# $2 P.2d 230 (Colo. 15&. ; 0ehaffy Rider <



su+,tted that notthstandn! notthstandn! the ds"la,er of assu,ptons# assu,ptons# the opnon !er 4@3 )t s further su+,tted "an +e held respons+le for an n"orre"t opnon f he ether ne of or had reason to +elee there e7sted# fa"ts "ontrar: to those "ontaned n the do"u,ents reeed.1 Hen"e# t s su+,tted that notthstandn! the assu,ptons# LA "an +e held la+le for an n"orre"t opnon sn"e t as aare that the e7e"uton and perfor,an"e perfor,an"e of the Lo) +efore the e7pr: of the 3 ,onth lo"En perod ould a,ount to a +rea"h of the ter,s and "ondtons of the Lo). !!3 DLA :$&$)< "##+:$ ($ 9"(# *!(+( !n=$#(!;"(!n; ($: 8&8$&)<

50. )t s su+, su+,tt tted ed that that LA LA shoul should d hae hae nes nest! t!at ated ed the "r" "r"u, u,sta stan" n"es es surro surround undn n! ! the transa"ton +efore !n! the opnon. A la:er "annot es"ape la+lt: ,erel: +: pontn! out that he has reled on the fa"ts proded +: the "lent.2 The sol"tor has an oerall respons+lt: of "areful nest!aton and superson n the ds"losure pro"ess and he "annot s,pl: leae ths tas to hs "lent.3 Thus# a passe falure to no "annot +e "la,ed as a defense +: the attorne:. attorne:.@ 51. )n the nstant nstant "ase# the "lent? "lent?ss e,plo:ees e,plo:ees ere alle!ed alle!ed to hae +een ndul!ed ndul!ed n "orrupt a"ttes# h"h as "o,,on noled!e een a,on! outsders le Naro.5 )n l!ht of su"h "r"u,stan"es# "r"u,stan"es# the "ounsel "annot ,erel: assu,e that there e7sted no fa"ts that "ould render the AA od. Hen"e# the opnon a,ounted to ne!l!ent ,srepresentaton. ;<. C=LLTN= HA A )-HT T U= LA

18ohn ter+a# L=-AL

A C*P=H=N)>= -U)= T P)N)N L=TT= PACT)C=# 2.11(3rd edn# 2003&. V Glne . 6rst 4estern 4estern -oern,ent e"urtes# e"urtes# 2@ 6.3d @$0 (3d Cr. 1@&. ; 2line<. P)N)N L=TT=

2 2line, 2@ 6.3d 6.3d @$0 (3d Cr. 1@& V -re:"as  Proud# $2% 6.2d 6.2d 15%0 (Dth Cr. Cr. 1$D&. ;'reycas< 3 *:ers . =l,an ;1@0< A.C. 2$2. @ lotn  Ctens Casualt: Co.# %1@ 6.2d 301 (2nd Cr.1D&. 5 F 10# 6a"tsheet. MEMORIAL FOR THE FOR THE APPELLANTPAGE 36


52. )t s su+,tted that the Celltone Celltone has a r!ht to sue LA on! to to reasons. %irst # +e"ause state,ents state,ents of opnon are a"tona+le 6!3 6urther# LA LA "an +e held la+le een f t does not share an attorne:E"lent relatonshp th the Celltone 6!!3

!3

S("( S("($: $:$n $n(# (# 9 8!n 8!n! !n n "&$ "&$ "(! "(!n n"' "')$ )$ "n "n $n $n$ $ DLA DLA "n "n '$ '$ $) $)  )!"' )!"')$ )$ 9& 9& "n "n !n&&$( 8!n!n3

53. Ad,ttedl: Ad,ttedl:## a state,ent on h"h la+lt: for ,srepresentat ,srepresentaton on ,a: +e +ased ,ust +e one of fa"t and not of e7pe"taton# est,ate# opnon or Bud!,ent.% Hoeer# a state,ent of opnon ,a: +e a"tona+le a"tona+le here the speaer possesses superor noled!e "on"ernn! the su+Be"t ,atter to h"h the ,srepresentatons relate# or here the opnon s Qreasonably interpreted by the recipient to i#ply that the speaker knows facts that 7ustify the opinion .?D 5@. Th Thee fa"t fa"t that that LA LA had perus perused ed the do"u,ent do"u,ent and that that the: the: ere ere the the 5- tar? tar?ss? le!al le!al

adsors nd"ates nd"ates that the: possessed superor noled!e "on"ernn! "on"ernn! the su+Be"t ,atter of the opnon and ,ade the state,ents th "ertant:.$ Hen"e# t as reasona+le for Celltone to +elee +elee that that LA LA Bknew facts that 7ustified the opinion and thus# the state,ent of opnon s a"tona+le a"tona+le. Thus# LA "an +e held la+le for an n"orre"t le!al opnon# due to ther superor noled!e of fa"ts h"h shaped ther opnon. !!3 !!3

A88$ A88$)) ))"n "n(( "n "n ) ) ($ ($ 9!& 9!&: : )!"') )!"')$$ $=$n $=$n ( (+; +;  ($< ($<   n( n( #"& #"&$$ "n "(( "((&n &n$< $<-)!$n( &$)"(!n#!8 &$)"(!n#!8

55. An attorne: attorne: oes a dut: to the thrd thrd partes partes that the attorne: attorne: nos nos or "an reasona+ reasona+l: l: foresee relan"e +en! pla"ed on the nfor,aton suppled +: h,.100 )t s su+,tted that to susta sus tan n a "la, "la, of ne!l ne!l!e !ent nt ,sre ,srepre presen senta tato ton n an atto attorne rne:E :E"l "le ent nt relat relaton onsh shp p s not % M,,er,an . Gent , , 31 *ass. App. Ct. D2# $2 (11&. D toloff . 4aste 4aste :s. )ntl# )n".# 5$ *ass.App.Ct. (2003&. $ Natonal an of Canada . Hale K orr# 4L 10@0D2 (*ass. uper. 200@& ; aleD&orr<  aleD&orr, up er. *@@8). aleD&orr, 4L 10@0D2 (*ass. uper. 100 Horon 6nan"al . Hansen# D1 6.upp. 15%1 (N..-a.12&. MEMORIAL FOR THE FOR THE APPELLANTPAGE 37


ne"essar:.101 )f the the attor attorne: ne:??s a"to a"tons ns are nten ntende ded d to ndu" ndu"ee a spe" spe"f f"" non nonE"l E"le ent? nt?ss reasona+le relan"e on hs or her representatons# then there s a relatonshp +eteen the attorne: and the thrd part: that su+sttutes the attorne:E"lent relatonshp reJure,ent.102 )n the nstant "ase# LA?s "losn! opnon as spe"f"all: addressed to Celltone and further,ore as a "ondton pre"edent to the AA. )t as reasona+l: foreseea+le +: LA that Celltone ould rel: on the nfor,aton proded n the opnon. ;C<. C=LLTN=? U= )L)-=NC= = NT = NT P=CLU= )T CLA)* A-A)NT LA

5%. )t s su+,tted that ,erel: +e"ause +e"ause Celltone "ondu"ted "ondu"ted due dl!en"e +efore entern! entern! nto ths ths a!re a!ree, e,en ent# t# t s not not pre" pre"lu lude ded d fro, fro, sun sun! ! LA LA for for an n"o n"orr rre" e"tt opn opno on. n. Th Thee nest!aton +: Celltone as l,ted onl: to the e7tent t "onsdered ne"essar: and ths nest!aton dd not ,pl: nonErelan"e on the opnon letter ssued.103 Thus# n the nstant "ase# ,erel: +e"ause the Lo) has +een ds"oered n the due dl!en"e# LA "annot +e e7"used fro, the la+lt: of !n! an n"orre"t le!al opnon. The sa,e s appl"a+le for the noled!e of the "orrupt a"ttes of )nd*o+le?s e,plo:ees.10@ ;<. LA ) L)AL= T PAI A*A-=

5D. )t s su+, su+,tt tted ed that that the opnon opnon !er !er s la+l la+lee to pa: da,a!e da,a!ess h"h h"h arse arse as a dre"t dre"t "ons "onseJ eJue uen" n"ee of the the ,sr ,srep epre rese sent ntat ato on n n the the opn opno on n lett letter er..105 )n the "ase of ,srepresentaton# the da,a!es aarded ,ust +e eJualent to the a,ount had there +een no ,srepresentaton. ,srepresentaton.10% As su+,tted a+oe# Celltone has ndeed reled on the opnon letter 101 'reycas # $2% 6.2d 15%0 (Dth Cr. 1$D&. 102 an"o Popular North A,er"a . uresh -andh# $D% A.2d 253 (2005&. 103 0ehaffy# $2 P.2d P.2d 230 (Colo.15&. 10@ Tea,ster Lo"al Penson Trust 6und . An!elos D%2 6.2d 522 (D th Cr# 1$5&. 105 &ean %oods# 200@ 4L 301@@2 (*ass.uper.& 10% Slotkin# %1@ 6.2d 301. MEMORIAL FOR THE FOR THE APPELLANTPAGE 38


that ndu"ed t to enter nto the "ontra"t on the +ass of the representatons. Had there +een no ,srepresentaton# Celltone ould not hae !one throu!h the transa"ton. Thus# the da,a!es ,ust +e aarded n full and an a,ount eJualent to the pur"hase "onsderaton ,ust +e pad to Celltone.

VII.

THE ACTS OF THE GOVERNMENT AMOUNT TO EXPROPRIATION

5$. )t s su+, su+,tte tted d that there there s a pr,a pr,a fa"e fa"e "ase for ndre"t ndre"t e7propr e7proprato aton n of the assets of Celltone Celltone and therefore# no antEar+traton antEar+traton nBun"ton should +e entertaned. entertaned. The n!redents for e7propraton under the )ndaEUG )T hae +een ,et n ths "ase +e"ause Celltone "an +e ter,ed an nestor 6A# the H!h Court Bud!,ent a,ounts to e7propraton# or a"ton eJualent to ndre"t e7propraton 6B therefore sn"e a pr,a fa"e "ase e7sts# no antE ar+traton nBun"ton should +e entertaned 6C3 ;A< C=LLTN= ) AN )N>=T 5. Cellton Celltonee s an nestor nestor for the purposes purposes of the )T. )T. Art" Art"le le 1(a& of the )T des"r+ des"r+es es a "o,pan: to +e a corporation, fir#s or association incorporated or constituted under the law in force in any part of the Enited 2ingdo# .10D )n the "urrent s"enaro# Celltone s a

"o,pan: as ,entoned n the fa"tsheet# to +e a Qleading teleco# services co#pany in the E2 ?10$. Therefore# the frst threshold s satsfed +: Celltone. Art"le 1(+& of the )T# nter

ala# n"ludes Q shares shares in and stock and debentures of a co#pany and any other other si#ilar for#s Celltone a"Jured @R of the shares n of interest in a co#pany ?.10 )n the "urrent s"enaro# Celltone 5- tar tar..110 Conse ConseJue Juentl ntl: :# ths ths eJut: eJut: hold holdn! n! sJu sJuare arel: l: falls falls th thn n the defn defnt ton on of nest,ent proded under the )T.

107 Art.1(a&# A!ree,ent +eteen The -oern,ent and epu+l" of )nda and The -oern,ent of the Unted Gn!do, Gn!do, of -reat rtan rtan and Northern Northern )reland for the pro,oton and prote"ton of nest,ents nest,ents (Adopted (Adopted on *ar"h 1@ 1@&. ;)T<.

10$ F@# 6a"tsheet. 10 Art.1(+&# )T. 110 FD# 6a"tsheet. MEMORIAL FOR THE FOR THE APPELLANTPAGE 39


;< TH= H)-H CUT 8U-*=NT A*UNT T ) N)=CT =PP)AT)N

%0. )t s su+, su+,tt tted ed that that the H!h Court Bud!,ent Bud!,ent a,ounts a,ounts to ndre"t ndre"t e7propr e7proprato aton n for to reasons. %irst # the a"t of the H!h Court ould a,ount to a !oern,ent a"ton. The H!h Court of Cal"utta s a part of the Bud"ar:# and therefore a tate or!an for the purposes of the UN Art"les on the Q Responsibility of States for internationally wrongful acts ?# h"h e7pressl: ,entons an: or!an h"h e7er"ses QBud"al fun"tons? as an or!an of the tate.111 The "ondu"t of the state or!an# h"h s the H!h Court s therefore an Qact of the State ?.112 %1. Secondly# the a"tons of the H!h Court depre Celltone of the Quse, value and en7oy#ent of ?.113The "an"ellaton of l"enses +: the tate# h"h ere aarded +: the tate its invest#ent ?. tse tself lf has has the the effe effe"t "t of depr depr n n! ! Cell Cellto tone ne of the the use# use# alu aluee and and enBo enBo:, :,en entt of ts ts nest,ent.11@ )n Tech#ed . 0e$ico# the ar+tral tr+unal found that the revocation of an .115 Ths proposton has +een operating operating license was an act 9tanta#oun 9tanta#ountt to e$propriat e$propriation3 ion3 . affr,ed affr,ed +: arous tr+unals. tr+unals.11% The reo"aton of these l"enses# ll "ause a hu!e loss to Celltone.11D

111 111 Art. @# Articles on Responsibility of States for internationally wrongful acts # ) NT=NAT)NAL NT=NAT)NAL LA4 C**))N# (Noe,+er# 2001&.

112 112 . *alhotra# Cancellation of teleco# licenses in the *' Case" Clai# for indirect e$propriation # %(2&# NU8 LA4  =>)=4 =>)=4# 335 (2013&.

113 113 .H. 4eston# Constructive Takings under nternational !aw" A #odest foray into the proble# of creeping e$propriation# 1%# > )-)N)A 8UNAL 6 ) NT=NAT)NAL NT=NAT)NAL LA4# 103 (1D%&.

114 114 UNCTA# Series on ssues in nternational nvest#ent Agree#ents, Takings of +roperty  # available at http//un"tad.or!/en/do"s/pstetd15.en.pdf. (Last sted on 8anuar: 12 th# 2015&V Co,paa del esarrollo de anta =lena# .A. . Costa "a# 15 )C) =>)=4 E6=)-N ) N>=T*=NT LA4 8UNAL (2000&# 1%# F D%.

115 115 Te"n"as*edoa,+entalesTe",ed .A. . The Unted *e7"an tates# Aard# *a: 2# 2003# @3 )L* 133 (200@&# F 11@.

Ta,s Affa Consultn! =n!neers# 1$@ % )ranEU CT 21# 225E%. 116 116 Tppets . Ta,s



;C< N A NT)EA)TAT)N ) N8UNCT)N HUL = =NT=TA)N=. %2. )t s su+,tted that sn"e the o+Be"ts o+Be"ts of the ar+traton dspute dspute and the pro"eedn!s +efore ths Court are dfferent# and there s no ,,edate ne7us +eteen the to o+Be"ts. The ar+traton dspute deals e7"lusel: th the reo"aton of the Cal"utta l"ense# hle the "urrent pro"eedn!s deal th the +rea"h of representatons +: 5- tar and )nd,o+le. n"e the o+Be"t of the ar+traton ar+traton dspute does not suffer an: ,,nent nBur: as a result of these pro"eedn!s# the th e strn!ent test for antEar+traton antEa r+traton nBun"tons nB un"tons n nest,ent ar+traton ar+tra ton s not satsfed11$ and the: should +e alloed to pro"eed as s. %3. Therefo Therefore# re# pri#a facie there s a le!t,ate "ase for re!ulator: e7propraton. e7propraton. )t s therefore su+,tted that no antEar+traton nBun"ton should +e entertaned +: the Court. PRAER

4herefore n l!ht of the ssues rased# ar!u,ents adan"ed and authortes "ted# t s hu,+l: pra:ed that ths Court ,a: ,a : +e pleased to hold# adBud!e adBud !e and de"lare thatV 1. The appea appeals ls fled fled +: the the appella appellant nt are alloed alloed.. 2. a,a!es n full# full# orth orth U S@0 ,llon ,llon are aarded to the appellant for fraudulent fraudulent +rea"h of the AA. 3. Th Thee es"ro es"ro a,oun a,ountt s rele release ased. d. @. arsh Le!al Le!al Asso"ate Asso"atess are la+le la+le to pa: da,a!es da,a!es orth orth S@0 ,llon ,llon for ne!l!ent ,srepresentaton. 5. No antEa antEar+ r+trat traton on nBun" nBun"ton ton "an "an +e entert entertane aned. d. And pass an: other order t ,a: dee, ft n the nterest of Bust"e# eJut: and !ood "ons"en"e. All of h"h s hu,+l: pra:ed# Tea, Code H156# Counsel for the appellant.

117 117 FD# 6a"tsheet.

11$ Cheron Corp . onn!er# No. No . 11 C. 0%1(LAG&# 2011 4L DD$052 (..N.I. (..N.I. *ar.D# *ar.D# 2011&. MEMORIAL FOR THE FOR THE APPELLANTPAGE 41


APPENDIX I

R ELEVANT ELEVANT PROVISIONS FROM LEGISLATIONS 13 PROVISO TO SECTION 58(2), COMPANIES ACT, 2!"

4thout preBud"e to su+Ese"ton (1&# the se"urtes or other nterest of an: ,e,+er n a pu+l" "o,pan: shall +e freel: transfera+le Proded that an: "ontra"t or arran!e,ent +eteen to or ,ore persons n respe"t of transfer of se"urtes shall +e enfor"ea+le as a "ontra"t. 23 S$( S$(!n !n 11 111A2, 1A2, C:8" C:8"n!$# n!$# A(, A(, 1@5 1@5

u+Be"t to the prosons of ths se"ton# the shares or de+entures and an: nterest theren of a "o,pan: shall +e freel: transfera+le. ;Proded that f a "o,pan: thout suff"ent "ause refuses to re!ster transfer of shares thn to ,onths fro, the date on h"h the nstru,ent of transfer or the nt,aton of transfer# as the "ase ,a: +e# s delered to the "o,pan:# the transferee ,a: appeal to the 3 ;Tr+unal< and t shall dre"t su"h "o,pan: to re!ster the transfer of shares<. 3 A&(3 A&(3 23143, 23143, UNID UNIDROI ROIT T P&!n P&!n!8) !8)$#3 $#3 MEMORIAL FOR THE FOR THE APPELLANTPAGE 42


Contra"t th Ter,s el+eratel: Left pen 1 )f the partes ntend to "on"lude a "ontra"t# the fa"t that the: ntentonall: leae a ter, to

+e a!reed upon n further fu rther ne!otatons or o r to +e deter,ned +: a thrd person does not preent pree nt a "ontra"t fro, "o,n! nto e7sten"e.2 The e7sten"e of the "ontra"t s not affe"ted +: the fa"t that su+seJuentl: " the partes rea"h no a!ree,ent on the ter,sV or ' the thrd person does not deter,ne the ter,# proded that there s an alternate ,eans of rendern! the ter, defnte that s reasona+le n the "r"u,stan"es# han! re!ard to the ntenton of the partes. 43 S$( S$(!n !n 7, P&$=$n( P&$=$n(!n !n 9 9 C&&+8( C&&+8(!n !n A(, A(, 1@??3 1@??3

Pu+l" serant tan! !ratf"aton other than le!al re,uneraton n respe"t of an off"al a"t. 4hoeer# 4hoeer# +en!# or e7pe"tn! to +e a pu+l" serant# a""epts or o+tans or a!rees to a""ept or atte,pts to o+tan fro, an: person# for h,self or for an: other person# an: !ratf"aton hateer# hateer# other than le!al re,uneraton# as a ,ote or reard for don! or for+earn! for+earn! to do an: off"al a"t or for shon! or for+earn! to sho# sho# n the e7er"se of hs off"al off"al fun"tons# faour or dsfaour to an: person or for rendern! or atte,ptn! to render an: ser"e or dsse dsser r"e "e to an: perso person# n# th th the the Centr Central al -oer -oern, n,ent ent or an: tate tate -oer -oern, n,ent ent or Parl Parla, a,ent ent or the the Le!s Le!slat latur uree of an: tat tatee or th th an: lo"al lo"al author authort: t:## "orpor "orporat ato on n or -oern,ent "o,pan: referred to n "lause ("& of se"ton 2# or th an: pu+l" serant# hether na,ed or otherse# shall +e punsha+le th ,prson,ent h"h shall +e not less than s7 ,onths +ut h"h ,a: e7tend to fe :ears and shall also +e la+le to fne. 53 S$ S$(! (!n n 10@, 10@, In!"n In!"n P$n" P$n")) C$ C$ 1?03 1?03

Punsh,ent of a+et,ent f the a"t a+etted s "o,,tted n "onseJuen"e and here no e7press proson s ,ade for ts punsh,ent. 4hoeer a+ets an: offen"e shall# f the a"t a+etted s "o,,tted n "onseJuen"e of the a+et,ent# and no e7press proson s ,ade +: ths Code for the punsh,ent of su"h a+etE ,ent# +e punshed th the punsh,ent proded for the offen"e. =7planaton.WAn a"t or offen"e s sad to +e "o,,tted n "onseJuen"e of a+et,ent# hen t s "o,,tted n "onseJuen"e of the nst!aton# or n pursuan"e of the "onspra":# or th the ad h"h "onsttutes the a+et,ent. )llustratons



(a& A offers offers a +r+e to # a pu+l" serant# as a reard for shon! A so,e faour n the e7er"se of ?s off"al fun"tons.  a""epts the +r+e. A has a+etted the offen"e defned n se"ton 1%1.

SUMMARIES OF R ELEVANT ELEVANT CASE LAS AS 13 C+&(n$ C+&(n$< <  F"!&'"!&n F"!&'"!&n L(3 L(3 = T T)"!n! B&# B&# H($)# H($)# L(311@

)n ths "ase# offered to help Tolan fnd a "ontra"tor to help h, +uld the hotel that he desred. The: entered nto a "ontra"t statn! that f the Tolan Jualt: supersor approed the pr"e that Courtne: as a+le to fnd# then Courtne: ould re"ee 5R of the pur"hase pr"e as pa:,ent. Courtne: found a potental +ulder# hoeer the Tolan Jualt: supersor ould not a""ept the ter,s. Tola Tolan n found another "ontra"tor thout the help of Courtne: and used h, to +uld hs proBe"t. Courtne: sued for +rea"h of "ontra"t and as su""essful at tral# h"h Tolan appealed. The ssue as hether the "ontra"t to enter nto a "ontra"t ald. Lord ennn! ds"ussed the ter,s of the "ontra"t that "learl: stated that the Jualt: sure:or ,ust ne!otate the pr"e th the Courtne:s "ontra"tor +efore a "ontra"t as rea"hed. )t therefore held that n the a+sen"e of an a!reed pr"e# t s un"on"ea+le that a "ontra"t "an +e esta+lshed. 23 T$ T$"$&# "$&# In#+&"n$ In#+&"n$ "n Ann+!(< Ann+!(< A##!"(!n A##!"(!n 9 A:$&!" A:$&!" =3 T& T&!'+n$ !'+n$ C3 120

11 Courtne: K 6ar+arn Ltd.  Tolan ros ;1D5< 1 All = D1% 120 Tea"hers )nsuran"e and Annut: Asso"aton of A,er"a . Tr+une Co %D0 6. upp. @1 (..N.I. 1$D& MEMORIAL FOR THE FOR THE APPELLANTPAGE 44


)n ths "ase# "ase# the +orroe +orroerr sou! sou!ht ht a loan under ter,s ter,s h"h h"h t +eleed +eleed ould per,t per,t t to e,plo: offset a""ountn!# +: h"h "ertan assets and la+ltes ould not appear dre"tl: on ts +alan"e sheets. sheets. The lender sent a letter h"h h"h set forth the +as" e"ono," ter,s ter,s of the proposed loan +ut h"h ,ade no referen"e to offset a""ountn!. )t nted the +orroer to send a "ounterpart of the letter# letter# upon h"h t,e the a!ree,ent ould +e"o,e +ndn! upon the partes. 4hen adsers to the +orroer e7pressed e7pressed dou+t that the e"urtes and =7"han!e =7"han!e Co,,sson ould a""ept the offset a""ountn!# the +orroer refused to "on"lude the loan. )n response to the lender?s "o,plant# the +orroer ar!ued that the lender had understood the loan loan to +e "ont "ontn n!e !ent nt upon upon the the +orr +orro oer? er?ss a+l a+lt t: : to e,pl e,plo: o: offs offset et a""o a""oun unt tn! n!.. The "ourt held that the a!ree,ent +e"a,e +ndn! hen the +orroer responded to the lender?s letter th an a""eptan"e letter that ,ade no ,enton of offset a""ountn!. 4hle there ere stll open ter,s# the: ere not +as" ter,s of pr,e ,portan"e and ere su+Be"t onl: to !oodEfath ne!otaton. )t esta+lshed that a +ndn! prel,nar: "o,,t,ent o+l!ates +oth sdes to ne!otate n !ood fath toards the "on"luson of a fnal Bud!,ent.

A

prel,nar: "ontra"t th +ndn! for"e o""urs hen the partes hae rea"hed "o,plete a!ree,ent# n"ludn! the a!ree,ent to +e +ound# on all the ssues per"eed to reJure ne!otaton. u"h an a!ree,ent s prel,nar: onl: n for, W onl: n the sense that the partes desre a ,ore ela+orate for,alaton of the a!ree,ent. The se"ond sta!e s not ne"essar:V t s ,erel: "onsdered desra+le. The ,ere fa"t that the partes "onte,plate ,e,o ,e,ora ral ln n! ! the therr a!ree, a!ree,ent ent n a for,a for,all do"u, do"u,ent ent does does not pree preent nt ther ther nfor, nfor,al al a!ree,ent fro, tan! effe"t pror to that eent. The partes "an +nd the,seles to a n"o,pl n"o,plete ete a!ree,ent a!ree,ent n the sense that the: a""ept a""ept a ,utual ,utual "o,,t, "o,,t,ent ent to ne!otat ne!otatee to!ether n !ood fath n an effort to rea"h fnal a!ree,ent thn the s"ope that has +een settled n the prel,nar: a!ree,ent. 3 %))!8"&" %))!8"&" S&!&":+ S&!&":+)+ )+ =3 T3 A#*"( A#*"("n"& "n"&"<"n "<"n" "  Oఱ

)n ths "ase the upre,e Court as "alled upon to de"de hether an oral a!ree,ent for sale of "ertan shares n a partnershp as effe"te +e"ause the partes "onte,plated the e7e"uton of a for,al do"u,ent. The Court held as follo  )t s ellEesta+lshed that a ,ere referen"e to a future for,al "ontra"t ll not preent a +ndn! +ar!an +eteen the partes. The fa"t that the partes refer to the preparaton of an a!ree,ent +: h"h the ter,s a!reed upon are to 121 Gollpara rra,ulu . T. T. Asathanara:ana Asathanara:ana K rs # A) 1%$ C 102$ MEMORIAL FOR THE FOR THE APPELLANTPAGE 45


+e put n a ,ore ,or e for,al shape does do es not preent the e7sten"e of a +ndn! + ndn! "ontra"t. "on tra"t. '' The eden"e addu"ed on +ehalf of the espondent No.1 does not sho that the dran! up of a rtten a!ree,ent as a prereJuste to the "o,n! nto the effe"t of the oral a!ree,ent. )t s# therefore# not poss+le to a""ept the "ontenton of the Appellant that the oral a!ree,ent as neffe"te n la +e"ause there s no e7e"uton of an: for,al rtten do"u,ent.

#. T$%&'$ $%&'$ AB . . S*+-/ S*+-/ (. (. 2) !22 )n ths "ase# the plantffs appled to per"e the "orporate el and treat the re"ept of ,one: +: the defendants "o,pan: as the re"ept of ,one: ,one : +: the defendant h,self. Ths as on the !rounds that (1& the "o,pan: had +een a sha, and no un"onne"ted thrd part: had +een noledV (2& the "o,pan: as +en! used to part"pate n ,proper a"ts# and (3& n the nterests of Bust"e. )t as held# !rantn! the appl"aton# that t as approprate to per"e the "orporate el n the "r"u,stan"es of the nstant "ase sn"e (1& the defendant as the onl: +enef"ar: and n "ontrol of the Co,pan:V (2& The a"ts of the defendant ere lned to the use of the "o,pan: stru"ture as a de"e to "on"eal the fa"ts so as to see to eade an: personal la+lt: on the part of ndduals# nddu als# and (3& t as "learl: n the nterests n terests of Bust"e Bust" e to do so sn"e the "o,pan: had +een used solel: as a eh"le of the re"ept of ,ones.

5. I$010%* I10+ T//* T//* . . M'$+ I$3$+'/1 !2" The plantffs fled a "r,nal "r,nal "o,plant a!anst the defendants defendants alle!n! offen"es offen"es of "heatn! and "onspra": under the )ndan Penal Code. The "o,plant alle!ed that the defendants had floated a prate pla"e,ent ,e,orandu, (PP*& to o+tan funds/nest,ents to fnan"e the )rdu, proBe"t. proBe"t. The nfor,aton nfor,aton proded n the ,e,orandu, as false and "aused a hu!e loss to the plantffs. The upre,e Court as "on"erned th the Jueston of "orporate "r,nal la+lt:# and attr+uton of #ens rea. )t as held that a "o,pan: "an +e held la+le for "r,nal offen"es reJurn! #ens rea. The Court stated that the #ens rea of persons Qentrusted with the e$ercise of powers of the Co#pany? "ould +e attr+uted to the "o,pan:.

122 Trustor A . ,all+one (no 2&# 2001 1 4L 11DD. 123 )rdu, )nda Tele"o, . *otorola )n"orporated# 2011 1 CC D@. MEMORIAL FOR THE FOR THE APPELLANTPAGE 46


4. M/$010+ G-+ G-+ F%1& F%1& M++/*/' M++/*/' A&0+ L'1 . . S/%$0'0/& C**0&&0!2# The a""used as the "hef nest,ent off"er of the plantff "o,pan:. 4th the "o,pan:s authort:# +ut thout the dre"tors noled!e# he pur"hased su+stantal shares n a pu+l" ssuer for the "o,pan:. No not"e as !en as reJured +: the e"urtes A,end,ent A"t 1$$ e"ton 20(3&. The Bud!e ,ade a de"laraton that the "o,pan: as n +rea"h of ts dut: to !e not"e. The Court of Appeal upheld that de"son on the +ass that the a""used as the dre"tn! ,nd and ll of the "o,pan:. The "o,pan: appealed to the 8ud"al Co,,ttee.

)t as held# ds,ssn! the appeal# that the approprate rule of attr+uton to +e ,pled as that a "orporate se"urt: holdn! "o,pan: "o,pan: ne t as a su+stantal holder n a pu+l" ssuer hen that holdn! as non to the person ho a"Jured the nterest th the "o,pan:s authort:# rrespe"te of hether that person as properl: des"r+ed as the dre"tn! ,nd and ll. )n the nstant "ase the a""used?s noled!e of the a"Juston as attr+uted to the e,plo:er.

6. B''0 I'/$+'0+ I'/$+'0+ I/&'*/'& I/&'*/'& L'1 . . V/& V/& G$%3 3 !25 The "la,ant "o,pan: sou!ht da,a!es for ,srepresentaton a!anst the senor off"ers of the defendant "o,pan: and for +rea"h of arrant: n relaton to the plantff?s pur"hase of shares n the defendant. The plantff as a potental nestor and had +een proded th a fnan"al fore"ast n "to+er nd"atn! that the defendants ould ,ae a su+stantal proft n 1. )n an updated fore"ast suppled suppled n e"e,+er e"e,+er the leel of e7pe"ted profts as redu"ed# +ut +ud!et f!ures f!u res referred to as Xud!et @X nd"ated nd" ated that a"tual profts n the frst frs t 10 ,onths of 1 ould +e ell a+oe the leel e7pe"ted n that +ud!et. Thereafter# the plantff had +ou!ht shares n the th e defendant defen dant for -P 10 ,llon +: + : ,eans of a share pur"hase p ur"hase a!ree,ent. hortl: after the a!ree,ent as s!ned# the defendants :earEend results ere prepared. These nd"ated that the: had ,ade a tradn! loss of oer -P 2 ,llon for 1 and not the su+stantal proft nd"ated n the fnan"al fore"asts suppled. )n l!ht of that ds"repan":# the 12@ *erdan -lo+al 6unds *ana!e,ent Asa Ltd . e"urtes Co,,sson # 15 2 AC 500. 125 ottn )nternatonal )nest,ents . >enson -roup pl"# 200% =4HC 3112. MEMORIAL FOR THE FOR THE APPELLANTPAGE 47


plantffs +rou!ht the nstant pro"eedn!s pro"eedn !s on !rounds that tha t the: had +een de"eed de" eed nto ,an! t he

nest,ent

+:

na""urate

fnan"al

nfor,aton.

Held# !n! Bud!,ent for the plantff# that n prodn!  th the e"e,+er fore"ast and ud!et @# the defendants had del+eratel: set out to prode a false sense of reassuran"e a+out ther profta+lt:. The n"luson of the +ud!et f!ures alon!sde the a"tual f!ures as ntended to !e the ,presson that the: ere operatn! s!nf"antl: +etter than the: had +een +ud!eted to. A""ordn!l:# s "la,s su""eeded.

8. L/0& L/0&  . . F+$0 F+$0 !24 The plantffs plantffs ere the shareholders of a fashon "o,pan:. "o,pan:. The "o,pan: +e!an runnn! at a loss# and the plantffs ne!otated to sell the "o,pan: to the defendants. urn! due dl!en"e# the: ds"losed that no ne "olle"ton had +een des!ned# that the "o,pan: as runnn! at a loss and n a don state# +ut the: dd not no ho ,u"h ,one: as +en! lost. After the pur"hase# the defendants defend ants realed the true Juantu, of the loss and sued. su ed. )t as held that on the redu"ton of a "o,pan:s assets +eteen +alan"e sheet date and "o,pleton# ds"losure !enerall: of the "auses of pro+a+le future losses# as opposed to ds"losure of a Juantfed redu"ton n the net asset alue or the a"tual rate of "ontnun! losses# ll not prote"t the endors of the "o,pan: fro, +en! n +rea"h of a arrant:.

7. D& D& . . C9+33 C9+33/ /!26 The plantffs +rou!ht a "ase a!anst the defendants for fraudulent ,srepresentaton h"h "aused the, to pur"hase a shop# and "la,ed the entre pur"hase "onsderaton as da,a!es. )n ths "ase# t as held that n "ases of fraud and de"et# the da,a!es should +e assessed on a no transa"ton +ass# +e"ause f the plantff had +een aare of the true f!ures there ould hae +een no transa"ton. The plantff should +e enttled to re"oer all the losses he had suffered h"h n"luded the entre pur"hase "onsderaton. 103 D$"n F# C3 =3 P"88"("n"#! P"88"("n"#! 12?

12% Leson . 6arn# 1D$ 2 All = 11@. 12D ons . Chappell# 1D 1 4L @2%. MEMORIAL FOR THE FOR THE APPELLANTPAGE 48


Ths "ase noled an opnon +: the sellers "ounsel to the pur"haser of a +usness that the seller as not the su+Be"t of an: lt!aton or nest!aton not ds"losed n a s"hedule to the pur"hase and sale a!ree,ent. The opnon dd not ds"lose a ta7 fraud nest!aton +: the U.. Attorne: of a "usto,er of the seller. The transa"tonal la:er ho prepared the opnon spoe to the lt!ator representn! the "lent n the ta7 fraud nest!aton a+out the ,atter +ut dd not atte,pt to o+tan a full p"ture of hat the lt!ator ne. )nstead# he reled on the X!uesst,ateX of the lt!ator that the nest!aton had ended. The lt!ators Bud!,ent proed to +e ron! the pur"haser re"eed re"eed a Xtar!et letterX fro, the U.. U.. Attorne: Attorne: three ,onths after the opnon as !en and eentuall: pad a SD.2 ,llon fne for adn! a ta7 fraud. The pur"haser then sued su ed the la fr, that delered the th e opnon# alle!n! that th at ts falure to ds"lose ds"los e the nest! nest!ato aton n "onstt "onsttuted uted ne!l!e ne!l!ent nt ,srepr ,srepresen esentat taton. on. The Bud!e Bud!e a!reed# a!reed# fndn! fndn! that that under the "r"u,stan"es "r"u,stan"es the transa"to transa"tonal nal la:er# la:er# n preparn! preparn! the opnon# opnon# had a dut: to to "ondu"t an approprate approprate nest!aton nest!aton (or thhold thhold the opnon& and that hs nest!aton nest!aton had fallen short of hat as reJured +: "usto,ar: pra"t"e. pra"t"e. Asn! Asn! the lt!ator# lt!ator# ho had not een +een adsed that the fr, as !n! an opnon# for hs assess,ent of the ,atter and rel:n! on hs X!uesst,ateX X!uesst,ateX as# n the Bud!es e# e# nsuff"ent. nsuff"ent. Thus# the fr, as held la+le for ne!l!ent ,srepresentaton.

113 113 G&$ G&$<"# <"# = P&+ P&+3312@

)n ths "ase# ,one: as to +e lent on the se"urt: of far, eJup,ent oned +: the +orroer. The lender reJured the +orroer to prode a la:ers attestaton as to the state of Art"le  fln!s a!anst the eJup,ent. That s# +efore ,an! the loan# the lender anted an opnon that the far, eJup,ent as not preousl: en"u,+ered +: se"urt: nterests n faor of other others. s. Th Thee la: la:er er rende rendered red an opn opnon on that that there there ere ere no su"h su"h pror pror en"u, en"u,+ra +ran"e n"es. s. Hoeer# the la:er a"tuall: as !norant on ths su+Be"t. He ,ade no sear"h h,self# s,pl: tan! the "lents ord that the eJup,ent as free and "lear. 4hen the "lent later defaulted on the loan# and the lender ds"oered that the far, eJup,ent as preousl: en"u,+ered# en"u,+ered# the lender sued the la:er. The The "ourt held that the la:er as la+le for han! 12$ ean 6oods Co. . Pappathanas# 1$ *ass. L. ptr. 5$# 200@ 4L 301@@2 (*ass. uper. e". 3# 200@&.

129 Greycas v Proud, 826 F.2d 1560 (7th !r. 1987"



,ade a ne!l!ent ,srepresentaton to a person to ho, he had undertaen to prode a professonal assess,ent. asses s,ent.

123 %)!n$ =3 F!&#( $#($& $#($&n n G=$&n:$n( S$+&!(!$#, S$+&!(!$#, In3 10

Ths "ase noled a seres of le!al opnons rendered +: la fr, h"h as sern! as "ounsel to 6rst 4estern -oern,ent e"urtes# a +usness h"h pro,oted ta7 shelters. 6rst 4estern 4estern "a,e to the la fr, and ased the fr, to render an opnon on the federal n"o,e ta7 "onseJuen"es of part"patn! n the ta7 shelter pro!ra,. )n su+stan"e# the opnons stated that part"paton n 6rst 4esterns pro!ra, ould result n ordnar: loss (or !ran& for the part"pants and a nd 6rst 4estern 4estern used these opnons opnon s n ts ,aretn! ,are tn! of the ta7 shelter pro!ra,. pr o!ra,. The opnons opnons n"luded n"luded nu, nu,erou erouss fa"tual fa"tual assu,pto assu,ptons ns and ere apparent apparentl: l: replete replete th th arnn!s and ds"la,ers# +oth as to the assu,ed fa"ts and the le!al "on"lusons. The plantffs n the "ase part"pated n 6rst 4esterns 4esterns ta7 shelter pro!ra, and dedu"ted losses +ased on ther part"paton. The ) too ssue th the dedu"tons and prealed after len!th: lt!aton. The plantffs sued the la fr, on the !rounds that t had ,srepresented fa"ts. The "ourt held that hen a la fr, nos or has !ood reason to no that the fa"tual des"rpt des"rpton on of a transa" transa"ton ton proded proded +: another another s ,atera ,aterall: ll: dffere dfferent nt fro, the a"tual a"tual transa"ton# transa"ton# t "annot es"ape la+lt: s,pl: +: n"ludn! n an opnon letter a state,ent state,ent that ts opnon s +ased on proded fa"ts. )t held that an attorne: "annot rel: on nfor,aton or assu,ptons f the attorne: has a"tual noled!e of fa"ts that under the "r"u,stan"es ould ,ae su"h relan"e unreasona+le.

130 Glne . 6rst 4estern -oern,ent e"urtes# )n".# 2@ 6. 3d @$0 (3d Cr. 1@&. MEMORIAL FOR THE FOR THE APPELLANTPAGE 50

NUJS-HSF Moot Court Competition, 2015: Finalists - Appellants

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