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Telecom Disputes Settlement and Appellate Tribunal: Justice S.K Singh (Chairperson), while hearing a petition regarding the dispute relating to the procedures to be followed by the telecom companies for obtaining the Unified License (UL), ordered in the favour of the petitioner, Aircel Ltd.

The issue in the present case arose when the Department of Telecommunications (DoT), Ministry of Communications, perpetually rejected the application of the petitioner for migration of its Cellular Mobile Telephone Service (CMTS) license to Unified License (UL) without properly considering the application of the petitioner.

The petitioner had filed for Corporate Insolvency Resolution Process under the Insolvency and Bankruptcy Code, 2016. By virtue of the provisions of IBC, a Resolution Professional (RP) was appointed and he was supposed to take over the charge of the debtor company so as to preserve the value of the property of the debtor company and manage its operation, suspending all the powers of the Directors of the petitioner company.

Under the broad guidelines laid down by the DoT for obtaining UL, Para 8 of which required the applicant company was required to submit an application which should be certified by the Company Secretary and authorized directors of the company. The petitioner company applied for the license with the respondents where the team of the appointed RP of the company had authorized the director of the petitioner company, Sandeep Vats, to be the authorised signatory.

The counsel for the respondents, Apoorv Kurup justified the decision of the respondents to reject the migration application of the petitioner company twice on the grounds of misrepresentation of the authorised signatory and non- compliance with the full procedure at the time of making the application on both the occasions.

The counsel for the petitioners, Salman Khurshid, contended that the power of attorney was transferred to Mr Vats by the team of the authorised RP and an email intimating the DoT was sent accordingly and hence the procedure was met with. Reliance was placed on the case of United Bank of India v. Naresh Kumar, (1996) 6 SCC 660  where it was held the even in the absence of an earlier Resolution of Board of Directors authorizing a person to sign the pleadings by an officer can be later ratified by a corporation later.

The Appellate Tribunal accepted the arguments of the petitioner and hence declared the order passed by the DoT on two previous occasions as bad in law and set it aside accordingly on the grounds of peculiar approach of the respondent in passing the orders.

The petition was allowed and the Tribunal held that the CTMS licence of the petitioner should be migrated to UL as a temporary arrangement till it is considered and made permanent by the DoT. [Aircel Ltd. v. Union of India, 2020 SCC OnLine TDSAT 1, decided on 10-01-2020]

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National Consumer Disputes Redressal Commission (NCDRC): A Single Member Bench of V.K. Jain, J., rejected an appeal filed against the order of State Commission whereby it was directed to pay the insurance amount to the respondent.

The respondent, in this case, entered into a contract with an overseas buyer for sale of some goods. As per the terms of the purchase order, the seller (respondent) was supposed to get the goods insured before sending them to seller and hence the respondent purchased an insurance policy from the appellant. The appellant did not ask for invoice or purchase order. As per the insurance policy the goods were insured till the time they reached the destination. The goods were lost in transit and the respondent claimed the insurance amount which was denied by appellant on the ground that the respondent had obtained the policy by misrepresentation.

The main issue that arose before the Commission was whether the appellant company was liable to pay the insurance amount of lost goods to the respondent

The Commission observed that the insurance company did not ask for invoice or the purchase order. Further, as it was clearly written in the purchase order that the seller (respondent) was supposed to get the goods insured before sending them to the buyer so it cannot be denied that the contract was a Cost, Insurance, Freight (CIF) contract. It is also undeniable that the goods were lost in transit, they did not reach their destination and as per the insurance policy itself, the goods were insured till the time they reached their destination.

The Commission held that since the goods had not reached their destination hence the ownership of the goods rested with the respondent and as per the terms of the insurance policy, he was entitled to receive the insurance amount. The Commission upheld the order of the State Commission and rejected the claims put forth by the appellant. [Oriental Insurance Co. Ltd. v. Ganesh Granites Ltd., 2018 SCC OnLine NCDRC 398, order dated 03-10-2018]

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Securities and Exchange Board of India (SEBI), Mumbai: The whole-time Member of SEBI, Madhabi Puri Buch addressed the issue of whether there was any prima facie suspicion or evidence of financial misrepresentation and misuse of books of accounts by the company in question.

Parsvnath Developers Ltd. (PDL) mentioned themselves as one of the largest real estate development companies in Northern India involved in development and construction of real estate projects. SEBI, on the basis of a letter by Ministry of Corporate Affairs where list of shell companies were provided, viewed these shell companies as potentially involved in misrepresentation and misuse of books of account. PDL was also in that list.

The Board asked for various documents as an evidence of work taken up by the company and saw a possible violation of SEBI (Listing Obligation and Disclosure Requirements) Regulation, 2015. Board noted that PDL had failed to show commencement certificates for any work of contract and sub-contract carried by it which suggested that the revenue of the company has been overstated as no evidence to show completion of work was provided. Company also failed to provide evidence of execution of contracts undertaken by the company or given to other companies.

Therefore, the board was of the view that in the interest of investors, the company’s finances should be independently audited. Under Sections 11, 11(4), 11-A and 11-B read with Section 19 of the Securities and Exchange Board of India Act, 1992, the Board directed the exchange to appoint an independent forensic auditor. Board concluded that the company was on suspicion of misusing the books of accounts and misrepresentation of financials/business of the Company. [Parsvnath Developers Ltd. In Re, 2018 SCC OnLine SEBI 154, order dated 08-08-2018]