001R

IN THE

HONORABLE SUPREME COURT OF RAIYA

AT SDL CITY

—IN THE MATTER OF—

GOD

MAN............................................................................................................APPELLANT

(REPRESENTED BY HIMSELF)

v.

UNION OF RAIYA..........................................................................................RESPONDENT

(REPRESENTED BY SECRETARY, MINISTRY OF HOME AFFAIRS)

CIVIL APPEAL NO. 123. OF 2021

(BROUGHT UNDER ARTICLE 133 OF THE CONSTITUTION OF RAIYA, 1950 READ WITH ORDER XIX,

RULE 1 OF THE SUPREME COURT RULES, 2013)

CLUBBED WITH

GOLIATH NATIONAL BANK AND ORS. …………………………………

APPELLANT

(REPRESENTED BY MANAGING DIRECTOR)

v.

UNION OF RAIYA AND ORS.

……………………………………………...RESPONDENT

(REPRESENTED BY SECRETARY, MINISTRY OF CORPORATE AFFAIRS)

 SPECIAL LEAVE PETITION (CIVIL) NO. 234 OF 2021

(APPEAL FILED UNDER ARTICLE 136 OF THE CONSTITUTION OF RAIYA READ WITH RULE 3(1),

ORDER XXI OF THE SUPREME COURT RULES, 2013)

ALL THE MATTERS HAVE BEEN CLUBBED

UNDER ARTICLE 142 OF THE CONSTITUTION OF RAIYA READ WITH RULE 3, ORDER LV OF

THE SUPREME COURT RULES, 2013

- MEMORIAL OF BEHALF OF THE RESPONDENT -

 TABLE OF CONTENTS

INDEX OF AUTHORITIES............................................................................................................ IV

STATEMENT OF FACTS.............................................................................................................. VI

STATEMENT OF JURISDICTION.................................................................................................VIII

ISSUES OF CONSIDERATION.......................................................................................................IX

SUMMARY OF ARGUMENTS........................................................................................................X

ARGUMENTS ADVANCED............................................................................................................1

I. THE INTERNATIONAL CRIMINAL COURT CODE DOES NOT HAVE THE JURISDICTION

WITHIN THE OVER THE TERRITORY OF RAIYA............................................................................1

II. THE CRIME AGAINST HUMANITY OF DEPORTATION AND PERSECUTION WERE NOT

CONDUCTED IN THE STATE OF RAIYA.........................................................................................3

THE CRIME OF DEPORTATION DID NOT TAKE PLACE..........................................................4

THE CRIME OF PERSECUTION UNDER ARTICLE 7(1)(H) CANNOT BE CONSTRUED...............5

III. THE TRIBUNAL HAD THE POWER TO PROHIBIT LEGAL PROCEEDINGS UNDER SECTION 242

OF THE COMPANIES ACT, 2013..................................................................................................9

IV. THE CONTRACTUAL RIGHTS OF THE LENDERS CAN BE UNILATERALLY MODIFIED BY THE

TRIBUNAL.................................................................................................................................11

A) THE TRIBUNAL HAS THE POWER TO MODIFY CONTRACTS UNDER SECTION 242 OF THE

ACT11

B) THE TRIBUNAL CAN MODIFY THE CONTRACT IN PUBLIC INTEREST...............................12

PRAYER FOR RELIEF.............................................................................................................14

iii
 INDEX OF AUTHORITIES

Statutes

Act s.242....................................................................................................................................9

Elements of Crime [“EoC”], General Introduction ¶2..............................................................2

EoC, art 7(1)(h)..........................................................................................................................6

Statute, art 12(1).........................................................................................................................3

Statute, art 12(2)(a)....................................................................................................................2

Statute, art 12.............................................................................................................................1

Statute, art 5...............................................................................................................................1

Other Authorities

K.J. Heller & M.D. Dubber, The Handbook of Comparative Criminal Law (Stanford Law

Books 2011, 1st edn.)..............................................................................................................3

Michael Kohajda, “Public Interest In Financial System Law” in Wydawnictwo Ewa Lotko,

Urszula K. Zawadzka- Pąk, Michal Radvan, Optimization of Organization And Legal

Solutions Concerning Public Revenues And Expenditures in Public Interest: Conference

Proceedings (Temida 2, 2018).............................................................................................12

Otto Triffterer & Kai Ambos, The Rome Statute of the International Criminal Court: A

Commentary (Bloomsbury 2016, 3rd edn.).............................................................................1

William A. Schabas, An Introduction to the International Criminal Court (Cambridge

University Press 2011, 4th edn.) at 235...................................................................................4

Regulations

Aero Industries v. Shree Shree Radha Swamy Plastics Ltd. & Ors., 2017 SCC OnLine

NCLAT 104.........................................................................................................................11

iv
Debi Jhora Tea Co. Ltd. v. Barendra Krishan Bhowmick, (1980) 50 Comp. Cas. 771 (Cal)

(DB)......................................................................................................................................12

N.R. Murthy v. Industrial Development Corporation of Orrisa Ltd., (1977) 47 Comp. Cas.

389 (Ori.)..............................................................................................................................12

Pearson Education Inc. v. Prentice Hall India (P) Ltd. and Ors., 134 (2006) DLT 450..........9

Sangramsinh P. Gaekwad & Ors v. Shantadevi P. Gaekwad, Civil Appeal No. 6359 of 2001.

..............................................................................................................................................12

Shanti Prasad Jain v. Union of India, [75 Bom. LR 778].......................................................10

State of Bihar v. Kamleshwar Singh, AIR 1952 SCC 252.......................................................12

Union of India v. Infrastructure Leasing and Financial Services Limited [“ILFS”], Order

dated 12.02.2020, Company Appeal (AT) No. 346 of 2018................................................11

Reports

Prosecutor v Popovic et al., IT-05-88, TC, 10 June 2010, ¶900...............................................4

Prosecutor v. Krnojelac, IT-97-25-A, 17 September 2003, ¶218..............................................3

Prosecutor v. Mathaura et al., ICC-01/09-02/11-382- Red, AC, 29 January 2012...................4

Prosecutor v. Thomas Lubanga Dyilo, ICC-01/04–01/06–772 ,14 December 2006, ¶24.........1

Prosecutor v. Vlastimir Dordevic, IT-05-87/1, AC, 27 January 2014, ¶522-523, 747..............2

v
 STATEMENT OF FACTS

The state of Raiya is an East Asian country that is not a state to the Rome Statute. Bonn

Raiyas and Tansenians are two ethnic groups in Raiya, former being the majority while the

latter is in minority. Tansenians live the autonomous province of Zigzag where the

government stated sending Bonns with better life opportunities than Tansenians. The

Government started setting up internment camps where only Tansenians were sent. The

Government passed a Counterterrorism Regulation in 2018 that states the establishment of

vocational skill education centres with the object of curbing extremist ideologies, a necessary

measure for national security. However, numerous reports by various sources have provided

that the ethnic minority of Tansenians were targeted and tortured by the government. It was

contended that the Tansenians were facing social discrimination and could not practice their

culture and religion anymore. As a consequence of the policies of the government, there was

mass exodus of Tansenians to the neighbouring state of Tigerstan, a party to the Rome

Statute. Tigerstan, on the request of Raiya, returned the refugees.

II

Bruce Financial Solution Company Limited [“BFSC”] is a Non- Banking Financial

Company in Raiya. It is engaged in many activities like loans and advances. BFSC took one

such short term loan from Golith National Bank [“GNB”] by selling 1-year commercial

paper. One long term loan was given to a foreign promoter to construct plant of electricity.

The construction of the plant halted due to environmental concerns and is facing litigation. In

2014, BFSC defaulting on its loans which led to the total debt of Rs 99,000 crores. Soon

after, an independent director of the company resigned claiming mismanagement of the

business affairs by the Board of Directors [“BoD”]. In 2015, the Government of Raiya took

vi
intervened in the matter which resulted in an order by the National Company Law Tribunal.

The order suspended the BoD and setting up of new BoD. It was injuncted legal proceedings

against BFSC and its subsidiaries for proper resolution process. The creditors challenged this

order and it was upheld in National Company Law Appellate Board. The creditors have

further appealed here.

Hence the present petition.

vii
 STATEMENT OF JURISDICTION

The Petitioners most humbly submit that this Hon’ble Apex Court of Raiya has the

jurisdiction to hear the present matters of:

(1) Civil Appeal No. 123 of 2021 filed under Article 133 of the Constitution of Raiya

read with Order XIX, Rule 1 of the Supreme Court Rules, 2013

(2) Special Leave Petition No. 234 of 2021 filed under Article 136 of the Constitution of

Raiya, read with Rule 3 (1) of Order XXI of the Supreme Court Rules, 2013.

The above-mentioned matters have been clubbed by this Hon’ble Apex Court of Raiya under

Article 142 of the Constitution of Raiya read with Rule 3, Order LV of the Apex Court Rules,

2013.

All of which is urged in detail in the written submission and is submitted most respectfully.

viii
 ISSUES OF CONSIDERATION

I. WHETHER THE INTERNATIONAL CRIMINAL COURT HAS THE

JURISDICTION OVER THE CRIME AGAINST HUMANITY IN THE STATE OF

RAIYA AS PER ARTICLE 12(2)(A)?

II. WHETHER THERE IS REASONABLE BASIS TO BELIEVE THAT THE CRIME

AGAINST HUMANITY OF DEPORTATION AND PERSECUTION AS PER

ARTICLE 7(1)(D) AND (H) HAS OCCURRED WITHIN THE TERRITORY OF

RAIYA?

III. WHETHER THE TRIBUNAL HAD THE POWER TO PROHIBIT LEGAL

PROCEEDINGS UNDER SECTION 242 OF COMPANIES ACT, 2013.

IV. WHETHER THE CONTRACTUAL RIGHTS OF THE LENDERS CAN BE

UNILATERALLY MODIFIED BY THETRIBUNAL?

ix
 SUMMARY OF ARGUMENTS

I. THE INTERNATIONAL CRIMINAL COURT DOES NOT HAVE THE

JURISDICTION OVER THE CRIME AGAINST HUMANITY IN THE STATE OF

RAIYA

The International Criminal Court cannot exercise it jurisdiction on the State of Raiya as

the subject matter does not fall within the jurisdiction of the Court. The preconditions for

the jurisdiction under Article 12 are also absent without which, the Court cannot exercise

jurisdictions.

II. THERE IS REASONABLE BASIS TO BELIEVE THAT THE CRIME AGAINST

HUMANITY OF DEPORTATION AND PERSECUTION HAS OCCURRED

WITHIN THE TERRITORY OF RAIYA

The crime against humanity of deportation and persecution has not occurred within the

territory of Raiya because specific elements of forceful displacement, mens rea for

deportation, deprivation of fundamental rights, targeting the population on the grounds of

ethnicity and gravity are not met. In the absence of any element, the acts cannot be

constituted as crimes.

III. THE TRIBUNAL HAS THE POWER TO PROHIBIT LEGAL PROCEEDINGS

UNDER SECTION 242 OF COMPANIES ACT, 2013.

The Tribunal did not exceed its powers by granting the protection from legal proceedings

falls within the ambit of the powers provided to it under Section 242(1) and Section 242(2)

(m) of the Act

IV. THE CONTRACTUAL RIGHTS OF THE LENDERS CAN BE UNILATERALLY

MODIFIED BY THE TRIBUNAL

x
The contractual rights of the lenders can be modified by the Tribunal as per the power

bestowed upon it via section 242 of the Act and in public interest.

xi
 ARGUMENTS ADVANCED

I. THE INTERNATIONAL CRIMINAL COURT CODE DOES NOT HAVE THE JURISDICTION

WITHIN THE OVER THE TERRITORY OF RAIYA

The term jurisdiction of the International Criminal Court [“ICC”] is interpreted by the as the

competence of the ICC to deal with a cause or matter under the Rome Statute [“Statute”].1

Article 12 of the Statute provides with the territorial jurisdiction of the ICC. 2 Three

conditions are required to be satisfied for the exercise of jurisdiction on a state by the ICC.

Firstly, the subject matter should find its place in the core crimes of article 5 of the statute. 3

Secondly, the preconditions of exercising the jurisdiction as laid down are met in the specific

case and thirdly, the case is initiated in accordance with the provisions of article 13. 4

However, in the present matter, the ICC cannot exercise its jurisdiction on the State of Raiya

as the subject matter does not fall under the core crimes of Article 5 5[a]; and the

preconditions of exercising the Jurisdiction are not met [b].

a) The subject matter does not fall under core crimes of article 5

The core crimes listed in the chapeau of Article 5 are crime of genocide, crime

against humanity, war crimes and crime against aggression. 6 The crimes that have

been specifically alleged to have occurred in the State of Raiya are crime against

humanity of deportation and persecution.7 The respondent has made the

1
Prosecutor v. Thomas Lubanga Dyilo, ICC-01/04–01/06–772 ,14 December 2006, ¶24.
2
Statute, art 12.
3
Otto Triffterer & Kai Ambos, The Rome Statute of the International Criminal Court: A
Commentary (Bloomsbury 2016, 3rd edn.).
4
Id.
5
Statute, art 5.
6
Id.
7
Proposition, The Winter Intra-University Moot Court Competition, 2021 [“Moot
Proposition”], ¶14
1
 submissions in the subsequent issue that there was absence of elements against

crime for either alleged crimes to have been committed in the territory of Raiya.

The lack of mental element to commit either crime negates the arguments of the

appeal.8 Since the events in Raiya do not fall under any core crime of art 5, the

Court cannot exercise ratione materiae jurisdiction on the State of Raiya.

b) The preconditions for the exercise of territorial jurisdiction are not met.

The preconditions of the court are found in Article 12 of the Statute. 9 Art 12(2)(a)

conditions that for the exercise of jurisdiction of ICC, the conduct in question

must have occurred in the territory of the State that is party to the Statute.10

In the matter in question, the condition under Article 12(2)(a) cannot be met

because the conduct of the alleged crime has not taken place, in part or whole, in

the territory of the Tigerstan (State party to the Statute) [i] and the state of Raiya is

not a party to the Rome Statute[ii].

(i) The absence of ‘conduct in question’ in the state of Tigerstan.

Many have interpreted that the conduct includes the effect of the act and therefore, in

deportation, it is believed that the crime is completed in the countries the refugees take

refuge in.11 However, the general paragraph clearly differentiates conduct and

consequences for the purpose of crime.12 A conduct requires an act or omission while a

consequence requires the result of the conduct.13 The criminal responsibility within the

8
Prosecutor v. Vlastimir Dordevic, IT-05-87/1, AC, 27 January 2014, ¶522-523, 747.
9
Statute (n2).
10
Id.
11
Statute, art 12(2)(a).
12
Elements of Crime [“EoC”], General Introduction ¶2.
13
K.J. Heller & M.D. Dubber, The Handbook of Comparative Criminal Law (Stanford Law
Books 2011, 1st edn.).
2
 statute is established by the forced character of deportation rather than the destination that

the inhabitants reach.14

Therefore, in the present case, the state of Tigerstan cannot approach the ICC as the alleged

conduct was constituted in the state of Raiya, and it is of no significance that the effects of

the conduct were felt in Tigerstan.

(i) The State of Raiya is not a party to the Statute.

Article 12(2)(a) requires the conduct of crime on the State that is party to the Statute. 15 The

drafters of the Statute voted against the universal jurisdiction of the ICC. 16 Whereas the State

has not provided its consent to accept the jurisdiction of the Court, ICC cannot exercise it. 17

In the present case, the State of Raiya has neither signed or ratified the Rome Statute. 18 The

State is not party to the Statute as it is considered affront to its national and territorial

sovereignty.19 Therefore, the ICC cannot exercise its jurisdiction on any conduct within the

borders of Raiya.

II. THE CRIME AGAINST HUMANITY OF DEPORTATION AND PERSECUTION WERE NOT

CONDUCTED IN THE STATE OF RAIYA

The chapeau of article 7(1) the Rome Statute [“Statute”] frames eleven acts that are

considered crimes against humanity [“CAH”].20 The acts of deportation and persecution fall

under the sub- clauses (d) and (h) of the article. 21 In the present case, the state of Raiya cannot

14
Prosecutor v. Krnojelac, IT-97-25-A, 17 September 2003, ¶218.
15
Statute, art 12(2)(a).
16
Otto (n3).
17
Statute, art 12(1).
18
Moot Proposition, ¶1.
19
Id.
20
Statute, art 7.
21
Id.
3
be held liable for the crimes against humanity because the elements of deportation [a]; and

persecution [b] are not satisfied.

The crime of deportation did not take place

The exodus of Tansenians cannot be termed deportation as per article 7(1)(d) because of the

absence of forceful displacement (i) mens rea (ii) and lack of fulfillment of all elements(iii).

(i) Forcible displacement by coercive acts

The term ‘forcible’ denotes that the movement of deportation was not

voluntary.22 The coercion may include acts like destruction of homes,

killings,23 injuries24 and public announcements that people of a certain

ethnicity must leave.25 In the present case, none of the above-mentioned acts

occurred in the State of Raiya. The policies of the Government were for

enforced for the decreasing extremist mindset.26 The alleged internment camps

were vocational training and education centres in reality which aimed at

improving the live and security of the citizens of Raiya.27

(ii) The government did not possess the mens rea to deport the Tansenians.

The term ‘Mens rea’ is the mental element of knowledge or intent required to

commit an offence.28 In the case of Popovic et al. case, mens rea to displace

across the border (de facto or de jure) is necessary for the crime of

deportation.29 In the present case, the facts are unable to demonstrate that the

22
EoC art. 7(1)(d).
23
Prosecutor v. Mathaura et al., ICC-01/09-02/11-382- Red, AC, 29 January 2012 
24
Id.
25
Id.
26
Moot Proposition, ¶8.
27
Id.
28
William A. Schabas, An Introduction to the International Criminal Court (Cambridge
University Press 2011, 4th edn.) at 235
29
Prosecutor v Popovic et al., IT-05-88, TC, 10 June 2010, ¶900.
4
 government had the intention to deport the Tansenian ethnicity. On the

contrary, when the mass exodus took place, the government requested

Tigerstan to return the Tansenians that had taken refuge in the neighbouring

State.30

(iii) Elements

The elements that have been laid down section 7(2)(d) in the Elements of

Crime are necessary to constitute the crime of deportation. 31 In the absence of

any one element, the acts of the accused cannot constitute crime against

humanity. Since the mens rea and the forcibility of the displacement cannot be

proved in the present situation, crime of deportation would not be constituted.

The crime of persecution under article 7(1)(h) cannot be construed.

The treatment of the government towards the Tansenians cannot be constructed as

persecution under art 7(1)(h) because deprivation of fundamental rights of Tansenians did not

take place (i), there was absence of targeting the population on the grounds of ethnicity (ii)

and absence gravity(iii).

(i) Absence of deprivation of fundamental rights

The government of Raiya was not depriving the people of Raiya of their fundamental

rights. The camps set up by the State were in accordance with the Counterterrorism

Regulation to pacify extremism which was primarily flourishing in the Tansenian

30
Moot Proposition, ¶13.
31
Dordevic (n8).
5
 population.32 The reports that claimed the use of torture and persecution in the

internment camps by the Raiyan Government cannot be relied upon.

The Big Apple Times Newspaper and International Freedom Report that reported

severe persecution by the Raiyan Government was based in Donald Chump. 33 The

state of Donald Chump considered the state of Raiya as its rival and had declared a

trade war against it.34 Therefore, there is reasonable cause to believe that the reports

by organizations of this state could be biased.

The BMW report, by an international non-governmental organization, had published

about the mass surveillance in Zigzag. 35 It did not report instances of torture,

persecution or discrimination.36

(ii) There was absence of targeting the population on the grounds of ethnicity

The grounds of targeting a group for persecution should be ‘political, racial,

national, ethnic, cultural, religious, gender.’37 However, in the case of Raiya,

the ground of choosing the participants of the vocational centres was their

association with extremist ideology.38

The spyware application was downloaded by every individual in Zigzag. 39

However, Zigzag did not solely consist the Tansenian ethnicity. The

Government had been actively relocating the Bonns in the province of Zigzag

to promote a common Raiyan culture.40 This area was under observation

32
Moot Proposition, ¶8.
33
Moot Proposition, ¶6, ¶9.
34
Moot Proposition, ¶4.
35
Moot Proposition, ¶10.
36
Id.
37
EoC, art 7(1)(h).
38
Moot Proposition, ¶8.
39
Moot Proposition, ¶10.
40
Moot Proposition, ¶5.
6
 because of the presence of extremism that had the potential to undermine

national security and not merely due to the presence of the Tansenian minority

ethnicity.

(iii) There was absence of the gravity required in the acts of the Government.

The Appeals Chamber, in the Krnojelac case, held that the gravity of the

persecution under paragraph (h) should be same as the crimes enumerated in

article 7.41

In the present case, the only reliable report is the BMW report that had found

evidence of the mass surveillance and the transfer to internment camp on the

basis of the information tracking.42 The internment camps were vocational

training and education centres providing for a platform for the integration of a

common culture in the residents of the autonomous Zigzag. 43 The mass

surveillance accorded the Government to flag threat of extremism. 44 Such acts

of the government do not form the gravity required for a crime to fall within

article 7.

(iv) Elements

The elements that have been laid down section 7(2)(h) in the Elements of

crime are necessary to constitute the crime of persecution. 45 In the absence of

any one element, the acts of the accused cannot constitute crime against

humanity.

41
Krnojelac (n14).
42
Moot Proposition, ¶4.
43
Moot Proposition, ¶8.
44
Moot Proposition, ¶4.
45
Dordevic (n8).
7
Since the elements of deprivation of fundamental rights, the grounds of

persecution and gravity are not met, the present case cannot fall within the

ambit of persecution.

8
III. THE TRIBUNAL HAD THE POWER TO PROHIBIT LEGAL PROCEEDINGS UNDER

SECTION 242 OF THE COMPANIES ACT, 2013

Section 242 of the Companies Act, 2013 [“Act”] deals with the powers of the National

Company Law Tribunal [“Tribunal”] to pass orders to regulate the conduct of the business

affairs of the company for the prevention of mismanagement and oppression in the

company.46

The order of the Tribunal dated 13.07.2017 did not exceed its powers by granting the

protection from legal proceedings is valid because of powers granted under Section 242(1)

[a]; Section 242(2)(m) [b] of the Act.

a) The prohibition against further legal proceedings is valid under section 242 (1) of the

Act

Sections 241 and 242 of the Act lays down the powers of the National Company Law

Tribunal to prevent oppression and mismanagement in a ‘company’ as defined under

section 2(20) of the Act.47 As per section 242 (1) of the Act, the Tribunal, in the belief

that the business of the company is conducted in such a manner that is prejudicial to

public interest, interests of the company or any member(s) of the company, can pass

any order as it deems appropriate.48

It has been reiterated by the court that once the Court is satisfied that oppression has

taken place, the Court has ample powers to pass an order which it thinks is necessary

and reasonable.49 In the present case, Bruce Financial Solution Company Limited

[“BFSC”] defaulted on several loans and incurred a total debt of Rs. 99,000 crores. 50

46
Act s.242.
47
Act s.241 s.242.
48
Act s.242(1)
49
Pearson Education Inc. v. Prentice Hall India (P) Ltd. and Ors., 134 (2006) DLT 450.
50
Moot Proposition, ¶22.
9
 However, it has contributed significantly in the economy of Raiya 51 and was engaged

in a plethora of business activities 52 which made it crucial to protect the interests of

the company.

Any legal proceedings would further add to the financial debt of the company and

may lead to winding up of BFSC which the section 53 aims to prevent. Therefore, the

order by the Tribunal to prohibit legal proceedings is reasonable and appropriate

within the powers provided to it in section 242(1).

b) The prohibition against further legal proceedings is valid under section 242(2)(m) of the

Act

The clause (m) of sub-section (2) of section 242 provides that the Tribunal can grant

any relief that it deems just and fit to prevent further oppression and mismanagement

of the Company.54 The powers of the tribunals are exhaustive in nature and that can be

interpreted from the clause55 itself. The specific powers listed in section 242(2) are not

restricting the power of the Tribunal but merely exemplifying it. 56 In Shanti Prasad

Jain case, the court held that the powers of the company board (now, Tribunal) cannot

be limited to section 402 of the Companies Act, 1956 (now, section 242 of the Act)

and are very wide.57 The suspension of the Board of Directors and ordering the setting

up new Board of Directors was done in accordance with the power of the Tribunal

under section 242(2)(h)58 and (k) 59 and therefore, is not being contended.

51
Moot Proposition, ¶15.
52
Moot Proposition, ¶¶16 – 19.
53
Act s.242(1).
54
Act s.242(2)(m).
55
Id.
56
Shanti Prasad Jain v. Union of India, [75 Bom. LR 778].
57
Id.
58
Act s. 242
59
Id.
10
 In Infrastructure Leasing and Financial Services Limited (case), the Court held that

although the moratorium under section 14 of the Code cannot be exercised on Non-

Banking Financial Companies [“NBFCs], the same can be done via the wide powers

granted to the Tribunal under section 242 of the Act.60

Therefore, in the present case, the Tribunal did not exceed the powers laid down in

section 242(2)(m) of the Act. The prohibition on further legal proceedings is just and

equitable.

IV. THE CONTRACTUAL RIGHTS OF THE LENDERS CAN BE UNILATERALLY MODIFIED

BY THE TRIBUNAL.

The contractual rights of the lenders are rights related to the contracts, for example, the right

to realise debt. In the present case, these contractual rights can be modified by the Tribunal

under section 242 of the Act [a]; and in public interest [b].

A) THE TRIBUNAL HAS THE POWER TO MODIFY CONTRACTS UNDER SECTION 242 OF

THE ACT

The contracts of a third party and the company can be modified by the Tribunal under

section 242 of the Act.61 In Pearson Education Inc. case the Court held that the

Tribunal has the right to decide the relief that can be granted via section 242 which

also includes validity, invalidity or setting aside of any contract 62 and the same was

reiterated in Aero Industries case. 63

60
Union of India v. Infrastructure Leasing and Financial Services Limited [“ILFS”], Order
dated 12.02.2020, Company Appeal (AT) No. 346 of 2018.
61
Act s.242.
62
Pearson (n49).
63
Aero Industries v. Shree Shree Radha Swamy Plastics Ltd. & Ors., 2017 SCC OnLine
NCLAT 104.
11
 The Company Law Board (now, the Tribunal) is not bound by the terms provided in

section 402 of Companies Act, 1956 (now, 242(2) of the Act) and can award a further

relief is the facts warrant.64 The Tribunal has the power to make any order to facilitate

the conduct of the company’s affairs even when they maybe contrary of the

provisions of the act or the articles of the company.65

Therefore, in the present case, it is within the power of the Tribunal in section 242 66 to

modify the terms of the contract between BFSC and GNB and other creditors even

without the consent of or notice to the party concerned.

B) THE TRIBUNAL CAN MODIFY THE CONTRACT IN PUBLIC INTEREST

The term ‘public interest’ denotes the general welfare of the society as opposed to

special privilege to some individuals or groups.67 The term cannot be given a precise

definition and has to be decided on case-to-case basis.68 The financial stability of the

economy is a public interest. 69 Financial institutions play a significant role in this

public interest.70

In the ILFS case, the government had made a contention that the defaulter company

had a huge impact on the financial market and the economy and therefore, argued for

64
Sangramsinh P. Gaekwad & Ors v. Shantadevi P. Gaekwad, Civil Appeal No. 6359 of
2001.
65
Debi Jhora Tea Co. Ltd. v. Barendra Krishan Bhowmick, (1980) 50 Comp. Cas. 771 (Cal)
(DB).
66
Act s.242.
67
N.R. Murthy v. Industrial Development Corporation of Orrisa Ltd., (1977) 47 Comp. Cas.
389 (Ori.).
68
State of Bihar v. Kamleshwar Singh, AIR 1952 SCC 252.
69
Michael Kohajda, “Public Interest In Financial System Law” in Wydawnictwo Ewa Lotko,
Urszula K. Zawadzka- Pąk, Michal Radvan, Optimization of Organization And Legal
Solutions Concerning Public Revenues And Expenditures in Public Interest: Conference
Proceedings (Temida 2, 2018).
70
Id.
12
 a moratorium on suits in the larger interest of the public. 71 The Tribunal was of the

opinion economic welfare was public interest and therefore, ordered for prohibition of

the proceedings against IL&FS and its entities in the interest of the public which was

upheld by the Appellate Tribunal.72

The factual matrix of the present care similar. BFSC is one of the most significant

contributors to the GDP of Raiya73 with 625 group companies.74 It is engaged in

national as well as international business.75 Akin to the facts of the IL&FS case 76, the

cascading effect would be felt in the economy of Raiya if the BFSC is wound up.

Therefore, the moratorium awarded by the court was in public interest and is valid in

the eyes of law.

71
ILFS, (n60).
72
Id.
73
Moot Proposition, ¶15.
74
Moot Proposition, ¶16.
75
Id.
76
ILFS, (n60).
13
 PRAYER FOR RELIEF

Wherefore, in light of the facts stated, issues raised, arguments advanced and authorities

cited, it is most humbly and respectfully prayed before this Hon’ble Court of Raiya, that it

may be pleased to:-

(1) Hold that the International Criminal Court does has jurisdiction over the crimes in

Raiya.

(2) Hold that crime against humanity as per article 7(1)(d) and (h) have not occurred

within the territory of Raiya.

(3) Hold that the Tribunal had the power to grant moratorium.

(4) Hold that the contractual rights can be unilaterally modified.

And pass any other order that it may deem fit in the ends of justice and good conscience.

Date: 13th January 2021 Counsel No. 001R

Place: SDL City (Counsel for Respondent)

14