IN THE HIGH COURT OF JUDICATURE AT MADRAS
M. DURAISWAMY, J.
M/s. Sun TV Network Ltd. Represented by its Managing Director Mr. K. Vijayakumar – Petitioner
Vs.
Union of India Rep. by the Secretary Ministry of Information & Broadcasting Government of India, New Delhi – Respondent
W.P. Nos. 11476, 11477, 21810, 21812, 21814, 21815 of 2015 & M.P. Nos. 1, 2, 3 of 2015
Decided On : 14-06-2016
Indian Contract Act, 1872 - Section 28 - Information Technology Act - Prevention of Money Laundering Act - Charges of corruption - Allegation of money - Jurisdiction of civil courts - Respondents As per clauses of NIA persons or entities convicted for certain class of offences are initio barred from applying for auction process - Further, according to respondents once this criterion is met there is a further process of security clearance to be obtained from relevant Ministries for companies and its Directors - Ministry of Information & Broadcasting sought security clearance from Ministry of Home Affairs for entities/individuals who were eligible to apply for auction process - Knowledge that conviction in certain classes of offences is a complete bar to even apply and that there is a need for subsequent security clearance from ministries concerned is clear to the parties to auction since it is mentioned in NIA itself – Held, Ownership and control of a company were not enough to justify piercing corporate veil - Court cannot pierce corporate veil even in the absence of third-party interests in Company merely because it is thought to be necessary in interests of justice - Corporate veil can be pierced only if there is some impropriety - Impropriety in question must be linked to use of company structure to avoid or conceal liability - To justify piercing corporate veil there must be both control of company by wrongdoers and impropriety that is, use or misuse of company by them as a device or facade to conceal their wrongdoing - However court would pierce corporate veil only so far as it was necessary in order to provide a remedy for particular wrong which those controlling company had done - Writ petitions are allowed
1. Since the issue involved in all these writ petitions are common, at the request of the learned Senior Counsel appearing on either side, the writ petitions were taken up together and disposed of by this common order.
2. W.P. Nos. 21810, 21812 and 21814 of 2015 are filed by M/s. Sun TV Network Ltd., M/s Kal Radio Ltd., and M/s. South Asia FM Ltd., respectively to issue Writs of Certiorarified Mandamus to call for the records of the 2nd respondent in their order dated 15th July, 2015, to quash the same and consequently direct the respondents 1 & 2 to permit the petitioners to migrate to FM Phase-III Regime by allowing the petitioner companies to resubmit the bank guarantee and permitting the petitioners to participate in the forthcoming FM Station Phase-III Auction pursuant to the Notice Inviting Application dated March 2nd 2015 for E-Auction of First batch of Private FM Radio Phase-III Channels.
3. W.P.Nos.21811, 21813 and 21815 of 2015 are filed by the petitioners, who are shareholders of M/s. Sun TV Network Ltd., M/s Kal Radio Ltd., and M/s. South Asia FM Ltd., respectively, to issue Writs of Certiorari to call for the records on the file of the 2nd respondent in their order dated 15th July, 2015 and to quash the same.
4. W.P.Nos.11476 & 11477 of 2015 are filed by M/s. Udaya FM Private Limited and M/s. Sun TV Network Ltd., to issue Writs of Mandamus to direct the respondents 1 & 2 to permit the petitioners to move to Phase-III policy for the FM Radio Station at 7 Vishakapatinam (in W.P.No.11476/2015) and Chennai, Coimbatore and Tirunelveli (in W.P.No.11477/2015) by entering into Grant of Permission Agreement [GOPA].
5. The brief case of the petitioner companies in W.P.Nos.21810 to 21815 of 2015 is as follows:
(i) According to the petitioners, they are running FM Radio Channels and that the said companies are in existence for more than 10 years. In order to establish, operate and maintain FM Radio broadcasting stations, they obtained license under Section 4 of the Indian Telegraph Act, 1885 under Phase-II Policy. The Phase-II Policy licenses were issued for a period of 10 years. The 2nd respondent, by its notice dated 1.1.2015 addressed to all private FM Broadcasters to migrate to Phase-III policy and also to new entrants and requested to provide information along with supporting documents. Pursuant to the same, the petitioner companies by its letter dated 02.01.2015 had furnished all the details to the respondents as required by them. By notice dated 16.01.2015, the 2nd respondent once again requested all Private FM broadcasters to submit the details of their shareholders and the petitioner companies by their letter dated 20.1.2015, had submitted the details of all its shareholders. Thereafter, by letter dated 24.02.2015, the 2nd respondent had requested the existing operators of Phase-II like that of the petitioner companies opting to migrate to FM Phase-III to fulfill certain conditions. According to the petitioner companies, the conditions were fulfilled by them and furnished to the respondents on 17.03.2015.
(ii) Further, according to the petitioner companies, the respondents had invited application on 02.03.2015 for the first batch of private FM Radio Phase-III Channels. On 27.03.2015, the petitioner companies, who are operating 18 Radio Stations, in order to bid in the auction for further Stations, submitted the applications with all required documents and necessary fees for the same.
(iii) After the submission of the applications, the respondent published a list in its official website on 15.07.2015 listing the broadcasters, who are permitted to migrate from Phase-II to Phase-III. In the said list, the names of the petitioner companies did not find a place. The petitioner companies came to understand that the petitioner companies names did not figure in the said list for denial of “Security Clearance” from the Ministry
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