Delhi District Court
Himachal Helicopter Skiing Pvt. Ltd vs Himalayan Heli Services Pvt. Ltd on 21 December, 2022
IN THE COURT OF DR. HARDEEP KAUR,
ADDITIONAL DISTRICT JUDGE-04, SOUTH DISTRICT,
SAKET COURTS, NEW DELHI.
Old Suit No.CS (OS) 348/2009
New Suit No.:CS DJ 242/2020
CNR No:DLST01-000023-2009
IN THE MATTER OF :
Himachal Helicopter Skiing Pvt. Ltd.
G.P.O. Box 2489, Melbourne Victoria
Australia and 8 Staniland Avenue,
Malvern Vic 3144
Australia
Through its power of attorney
Mr. Vikrant Singh Jafa .......Plaintiff
Versus
1. Himalayan Heli Services Pvt. Ltd.
104, 7, L.S.C Madangir,
New Delhi - 110062
2. Harsh Vardhan Sharma
Director
Himalayan Heli Services Pvt. Ltd.
104, 7, L.S.C Madangir,
New Delhi - 110062
3. Wangchuk Shamshu
Director
Himalayan Heli Services Pvt. Ltd.
104, 7, L.S.C Madangir,
New Delhi - 110062
4. World Expeditious (India) Pvt. Ltd.
104, 7, L.S.C Madangir,
New Delhi - 110062 .......Defendants
Suit instituted on : 20.02.2009
Judgment pronounced on : 21.12.2022
Old Suit No.CS (OS) 348/2009
New CS DJ 242/2020 Himachal Helicopter Skiing Pvt. Ltd. v. Himalayan Heli Services Pvt. Ltd. Page no. 1 of 47
JUDGMENT
Suit for Permanent, Mandatory Injunction, Damages and Rendition of Accounts
1. The brief facts of the case as stated in the plaint are that one of the directors of the plaintiff company, Mr. Roderick John Andrew Machenzie has been duly authorized by the plaintiff company to appoint an authorized representative and attorney for and on behalf of the plaintiff company vide its board resolution and special power of attorney dated 30th May 2008 and that the plaintiff has duly appointed Mr. Vikrant Singh Jafa as the special power of attorney holder for the plaintiff. The plaintiff company has been involved in heliskiing operations in India since 1988 and was originally incorporated in Australia on 27 th June 1988 by the trading name "Himalayan Heliskiing Pvt. Ltd." as per its Certificate of Incorporation, Memorandum of Association and Articles of Association.
2. The plaintiff vide letter bearing no. J-19011/6/88-1A dated 23.08.88 issued by the Govt. of India, Department of Environment, Forests and Wildlife was granted environmental clearance to commence its heliskiing operation in Manali, Kullu District, Himachal Pradesh, India. Subsequently, an agreement was entered into on 7th September 1988 between the Governor of Himachal Pradesh through the Secretary (Tourism) to the Govt. of Himachal Pradesh and the plaintiff company represented by its Director, Mr. Roderick John Andrew Machenzie permitting the plaintiff company to carry on heliskiing operations in Manali. This was further confirmed by the Department of Tourism, Govt.
Old Suit No.CS (OS) 348/2009 New CS DJ 242/2020 Himachal Helicopter Skiing Pvt. Ltd. v. Himalayan Heli Services Pvt. Ltd. Page no. 2 of 47 of India vide letter dated 05.02.1999. The plaintiff has been licensed by the Governor of Himachal Pradesh through the Secretary (Tourism) to the Govt. of Himachal Pradesh to continue its heliskiing operations for a further period of thirty years vide agreement dated 15th March 1999. From 1988 onwards, the plaintiff company quickly grew on to become one of the premier and most exclusive heliskiing operators in India and the world and has over the years received extensive media coverage and publicity worldwide. The plaintiff has its own website (www.himachal.com). The plaintiff is a pioneer in the sport of heliskiing in India and was instrumental in opening up the Manali area to heliskiing.
3. The defendant no. 1 is a private limited company having its office at 104, 7, L.S.C. Madangir, New Delhi - 110062 and is represented by its Directors, defendant no. 2 Mr. Harsh Vardhan Sharma and defendant no. 3 Mr. Wangchuk Shamshu. The defendant no.2 & 3 are responsible for the day to day management, control, affairs and conduct of the defendant no. 1. The defendant no. 4, World Expeditions (India) Pvt. Ltd. is the parent/holding company of the defendant no. 1 and alongwith defendant no. 2 & 3 is a member and shareholder of defendant no. 1.
4. The plaintiff prior to the incorporation of defendant no.1 carried on heliskiing operations in Manali by taking on lease helicopters from leading aviation companies based in Switzerland and from other parts of the world. The plaintiff had also appointed the defendant no. 2, 3 & 4 as its agents to provide Old Suit No.CS (OS) 348/2009 New CS DJ 242/2020 Himachal Helicopter Skiing Pvt. Ltd. v. Himalayan Heli Services Pvt. Ltd. Page no. 3 of 47 ground transfers and logistics support to the plaintiff's heliskiing customers in India. The defendant no. 2 & 3 with the malafide intention to exploit the experience and expertise of the plaintiff approached the plaintiff with the proposal to incorporate an aviation company by offering the plaintiff equity shares in the said aviation company. As per the foreign investment rules prevailing in India at that time, however, the plaintiff was restricted to an equity cap of 40% in an aviation company, which would not have been sufficient to cater for the plaintiff's substantial overall investments and contributions in the defendant no.1. The defendant nos. 2 & 3 however, assured the plaintiff that they would issue equity shares in the proposed aviation joint venture company in the proportion of the plaintiff's overall investments and contributions in the defendant no.1 company as and when the law in India permitted. The negotiations concerning issuance of equity shares in the proposed aviation joint venture company by the defendants to the plaintiff were inter alia, held at the office of the defendant no.1 situated at Madangir, New Delhi.
5. The plaintiff, being an Australian entity, in order to more efficiently manage and expand its heliskiing operations in India agreed to the incorporation of an aviation joint venture company with the defendants to own and operate their own helicopters, to better support overall the plaintiff's heliskiing operations in India. Towards this end the plaintiff, because of their existing working relationship with the defendant nos. 2, 3 and 4 entered into negotiations with them for incorporating the said aviation joint Old Suit No.CS (OS) 348/2009 New CS DJ 242/2020 Himachal Helicopter Skiing Pvt. Ltd. v. Himalayan Heli Services Pvt. Ltd. Page no. 4 of 47 venture company i.e. the defendant no.1 and accordingly, by an e-mail dated 04.05.2000, the defendant nos. 2, 3 and 4 proposed incorporation of an aviation joint venture company by the plaintiff and the defendants.
6. Due to urgent operational requirements preceding the upcoming heliskiing season, the plaintiff agreed to finance the purchase of two helicopters on behalf of the defendant no. 1 and the defendants would issue equity shares in the defendant no.1 company to the plaintiff based upon the understandings, acknowledged course of dealings and the agreement between the plaintiff and the defendants. The plaintiff vide wire telex dated 30.11.2000 and 21.12.2000 paid sums of CHF 460,000, CHF 442,250 and USD $ 276,000 and purchased and supplied two helicopters to defendant no.1 in order to support the plaintiff's heliskiing operations in India. Apart from financing the purchase of the helicopters, the plaintiff also rendered valuable consultancy services to the defendants including helicopter operations, fuel handling, marketing, ground operations, communications system, group management, ground safety, engineering support, inventory storage and management, flight planning and consultancy on numerous other subjects including technical consultancy, marketing, publicity, support, advertisement, management and supervision to the defendant no. 1 company. Without the active assistance, specific and special involvement and expertise of the plaintiff, the defendants would not have been able to carry on helicopter operations in Manali or elsewhere owing to the fact that they had absolutely no prior Old Suit No.CS (OS) 348/2009 New CS DJ 242/2020 Himachal Helicopter Skiing Pvt. Ltd. v. Himalayan Heli Services Pvt. Ltd. Page no. 5 of 47 domain knowledge and experience in the field at all, and were earlier primarily engaged in providing logistics and ground transfer support for the plaintiff's heliskiing customers in India, simply as a mere travel agent, and not as an aviation company prior to the incorporation of the defendant no.1.
7. The plaintiff and defendants, in order to finalize their relationship further and to put their commitments in writing exchanged several agreements, but due to deliberate delays on the part of the defendants on one pretext or the other, the same were not executed. The parties even prepared a document titled as "Heads of Agreement" wherein it was agreed that the plaintiff would be issued equity shares in the defendant no.1 company. In addition, a Memorandum of Understanding was also exchanged between the plaintiff and the defendants spelling out the terms and conditions of their understanding. Further, the parties had in several meetings discussed the organizational structure, operations, day to day management, control and affairs of the defendant no.1 which included consideration of issuance/transfer/allotment of equity shares in Defendant no.1 to the plaintiff vide Minutes of Meetings dated 26th and 27th March 2003. In accordance with the above assurances and agreements made by the defendants, the plaintiff and defendants continued to carry on business as effective joint venture partners with the plaintiff as the foreign collaborator of the defendant no.1 pending allotment of equity shares to the plaintiff proportionate to its overall contributions and investments in the defendant no. 1 company in accordance with the Foreign Direct Investment Old Suit No.CS (OS) 348/2009 New CS DJ 242/2020 Himachal Helicopter Skiing Pvt. Ltd. v. Himalayan Heli Services Pvt. Ltd. Page no. 6 of 47 Policy of the Government of India. The defendants continued assuring the plaintiff that as and when the law permitted, they would issue enquiry shares in the defendant no.1 company to the plaintiff, proportionate to the plaintiff's overall contributions and investments in the defendant no.1 company. It was in reliance of and upon these assurances and promises of the defendants that the plaintiff was induced and misled into purchasing and supplying the aforesaid helicopters, valuable spare parts and consultancy to the defendant no.1, apart from also providing for the ongoing repairs to the helicopters.
8. Plaintiff was utterly shocked, surprised and disappointed with the defendants that despite a change in law entitling the plaintiff to hold more than 40% equity shares in defendant no.1, and repeated assurances by the defendants, the defendants nevertheless repeatedly and deliberately failed and /or neglected to transfer any equity share in the defendant no.1 company in favour of the plaintiff on one pretext or another. The defendant also failed to facilitate the appointment of any of the plaintiff's nominees as Directors on the Board of the defendant no.1. The defendant no.2 vide his e-mail dated 28.09.2004 categorically admitted that defendant no.1 is committed to an aviation joint venture with the plaintiff and that it shall issue equity shares in the defendant no.1 company to the plaintiff proportionate to its overall contributions and investments as and when the law in India changed. The defendant no.2 further as per his e-mail dated 27.08.2004 has admitted to checking with the Ministry of Civil Aviation regarding the procedural requirements that need to Old Suit No.CS (OS) 348/2009 New CS DJ 242/2020 Himachal Helicopter Skiing Pvt. Ltd. v. Himalayan Heli Services Pvt. Ltd. Page no. 7 of 47 be complied with for issuing, allotting and /or transferring equity shares to the plaintiff in the defendant no.1 company. The defendant no.2 has even affirmed the passing of the bill by the Indian Parliament to raise the foreign direct investment in airlines business by his e-mail dated 20.10.2004 addressed to the plaintiff.
9. Perusal of the series of e-mails and minutes of meetings exchanged between the plaintiff and defendants clearly establishes beyond doubt that the plaintiff and defendant carried on business as effective joint venture partners with the plaintiff as the foreign collaborator of the defendant no.1. In particular, the e-mails dated 13.10.2005, 14.10.2005 and 17.10.2005 reflect that the plaintiff also supplied valuable spare parts, including Chadwick worth USD$ 5000, Turbine worth USD $ 61,000/-, Main Gear Box worth CHF 115,000 and other helicopter parts worth approximately 3000 Euros for the helicopters used by the defendant no.1 and continued to be utilized by the defendant no.1 to date. Further, the e-mails dated 21 st and 23rd February, 2006 clearly establish that the plaintiff made payments for repair of helicopter VT-EJS-SA LAMA 315B used by the defendant no.1.
10. The Director of the plaintiff Mr. Roderick John Andrew Mackenzie had also entered into Sale and Purchase Agreements for purchase of helicopters for and on behalf of defendant no.1, which further establishes that the plaintiff and the defendants carried on business as joint venture partners and that the plaintiff was the foreign collaborator of the defendant no.1 company. The Old Suit No.CS (OS) 348/2009 New CS DJ 242/2020 Himachal Helicopter Skiing Pvt. Ltd. v. Himalayan Heli Services Pvt. Ltd. Page no. 8 of 47 plaintiff relying upon the false promises and misrepresentations of the defendants performed its obligations as a sincere and efficient aviation joint venture partner and foreign collaborator. The plaintiff invested a substantial amount of time, money and effort based upon the false assurances of the defendants. Without the plaintiff's extremely specialized expertise and experience of heliskiing, the defendant's role would have been virtually redundant, and overall entirely dispensable. From the very inception, the plaintiff's experiences as an honest and ethical foreign collaborator and investor have been extremely unpleasant, and its reliance upon the defendants was completely misplaced. Plaintiff was always at the receiving end and has been a victim of defendant's manipulations, apart from the defendants' erratic and volatile behaviour as irresponsible corporates.
11. The reason for the defendants not complying with their legal obligations and duties to the plaintiff was that by this time the defendants had realized how lucrative controlling and operating virtually free helicopters was, and with the sole intention of denying the plaintiff's share in the business, cheated the plaintiff. The defendants by their e-mails dated 31.01.2002 and 06.11.2004 therefore, deliberately tried to make out that there were some alleged false and frivolous disputes and differences with the plaintiff. The defendant no.2 by his e-mail dated 18.08.2005, even conveniently suggested an alleged separation mechanism and proposed that the plaintiff's customers could be served purely on commercial terms in the same manner as in the pre-aviation joint venture era, without the defendants first Old Suit No.CS (OS) 348/2009 New CS DJ 242/2020 Himachal Helicopter Skiing Pvt. Ltd. v. Himalayan Heli Services Pvt. Ltd. Page no. 9 of 47 fulfilling their existing prior legal commitments to the plaintiff. All the communication between the parties clearly establish that there was indeed an aviation joint venture in existence for all intents and purposes that was to be formalized by allotting, transferring and/or issuing equity shares in the defendant no.1 company to the plaintiff, proportionate to the plaintiff's overall contributions and investments in defendant no.1 and appointing the plaintiff's directors on the Board, which the defendants deliberately did not perform by providing false, baseless and frivolous excuses.
12. The plaintiff attempted to amicably resolve all outstanding issues that had arisen between the parties. The plaintiff deputed their chartered accountant to conduct negotiations on its behalf with the defendants. The defendant no.2 has also acknowledged these meetings in his e-mail dated 09.11.2005. Further, by email dated 15.11.2005 to the defendants, the plaintiff also proposed a "high level approach" to reach a settlement and accord with the defendants. Despite several attempts by the plaintiff, the negotiations between the plaintiff and the defendants finally broke down and the plaintiff by its letters dated 9 th and 16th August, 2006, called upon the defendants to honour their commitments and issue/allot/transfer equity shares in defendant no.1 to the plaintiff. The defendants have acknowledged the aforesaid letters and are therefore deemed to have accepted the contents thereof and are estopped from now denying the same. The defendants are thus legally bound to issue / allot / transfer equity shares in defendant no.1 to the plaintiff to the extent of the Old Suit No.CS (OS) 348/2009 New CS DJ 242/2020 Himachal Helicopter Skiing Pvt. Ltd. v. Himalayan Heli Services Pvt. Ltd. Page no. 10 of 47 plaintiff's overall contributions and investments in defendant no.1 company made to date.
13. The defendants have not only failed to issue, transfer and/or allot the equity shares in the defendant no.1 to the plaintiff but are also effectively denying the plaintiff access to the helicopters, thereby making it impossible for the plaintiff to conduct heliskiing operations with its own dedicated helicopters in Manali, which was the original intention behind the plaintiff's investments i.e. to have a secure and dedicated supply of helicopters for its customers during the heliskiing season. The plaintiff by emails dated 18th and 19th October, 2005, called upon the defendants to make available all the three helicopter i.e. VT- EJS-SA LAMA 315B, VT-XPP AND VT-EDT for the helicopter skiing season 2005-2006. The helicopters were financed and purchased so that the plaintiff would have reliable helicopters that were maintained to the plaintiff's high standards and so that the plaintiff would not have to deal with the unreliability of supply, lack of control and supervision and other related problems that were faced by it when they otherwise hired helicopters from elsewhere. Despite the same, the defendants did not make available all the three helicopters VT-EJS-SA LAMA 315B, VT-XPP AND VT-EDT and instead called upon the plaintiff to hire only two helicopters VT-EJS-SA LAMA 315B, VT-XPP on purely commercial terms at a market rate of Rs.40,000/- per hour by their e-mail dated 03.12.2005.
14. The plaintiff apart from being denied its legitimate rights Old Suit No.CS (OS) 348/2009 New CS DJ 242/2020 Himachal Helicopter Skiing Pvt. Ltd. v. Himalayan Heli Services Pvt. Ltd. Page no. 11 of 47 in defendant no.1 was further forced to unfairly agree to take its own helicopters back on lease in order to conduct the heliskiing operations and season without disruption and to fulfill the plaintiff's responsibilities to its heliskiing customers. Being blackmailed thus by the defendants, the plaintiff very reluctantly agreed to use the two helicopters under protest, although it did not waive its claim over the helicopters which were originally purchased by the plaintiff. The plaintiff vide its email dated 03.12.2005, had in fact categorically stated that the helicopters were indeed purchased and owned by the plaintiff, which fact was not ever denied by the defendants and they are therefore deemed to have accepted the contents thereof and are estopped from now denying the same.
15. The defendants have also attempted to mischievously interfere with the license for heliskiing issued by the plaintiff's favour by unilaterally offering to inform the Govt. of Himachal Pradesh that the plaintiff would not be able to renew their heliskiing license, vide their e-mail dated 19.07.2006. The defendant no.2 unauthorizedly even wrote to the Commissioner, Tourism and Civil Aviation, Government of Himachal Pradesh vide letter dated 8.08.2006 regarding the re-drafting of the heliskiing license issued in favour of the plaintiff, despite the defendants not being a party to the same. The defendants have also purposely allowed the letter concerning grant of recognition as approved tour operator to lapse. The plaintiff protested against these unilateral and unauthorised actions of the defendants vide their letters dated 9th and 16th August, 2006. The plaintiff's Old Suit No.CS (OS) 348/2009 New CS DJ 242/2020 Himachal Helicopter Skiing Pvt. Ltd. v. Himalayan Heli Services Pvt. Ltd. Page no. 12 of 47 heliskiing customers have, over a period of time, been facing a variety of problems in India and have been making complaints on a regular basis in respect of the quality and in particular and safety and secure operations of the helicopters currently being maintained and operated by defendant no.1. The defendant no.2 in reply to the plaintiff's email dated 7.02.2004 has in fact admitted to compromising on the safety standards in respect of the helicopter operations. The plaintiff has been involved in conducting heliskiing operations since 1988. This has also been acknowledged by the defendants in their letter dated 21.02.2002 addressed to the Deputy Director of the Directorate General of Civil Aviation.
16. Being aggrieved by the unlawful and illegal conduct of the defendants, the plaintiff addressed letters to the Hon'ble Ministry of Civil Aviation, the Hon'ble Ministry of Tourism and the Principal Secretary of Tourism, Govt. of Himachal Pradesh requesting them to initiate necessary inquiries and take appropriate action against the defendants. The plaintiff and the defendants carried on business as aviation joint venture partners with the plaintiff as the foreign collaborator of the defendant no.1 company. The plaintiff not only purchased the helicopters but even financed the repairs of the helicopters used by the defendant no.1 and supplied the spare parts, including other assets like cars valued at approximately Rs.6,00,000/- apart from providing valuable consultancy to the defendants. Copies of e-mails dated 15th March and 1st April, 2006 clearly reflect that the plaintiff finance the repair of VT-EJS-SA LAMA 315B at Hindustan Old Suit No.CS (OS) 348/2009 New CS DJ 242/2020 Himachal Helicopter Skiing Pvt. Ltd. v. Himalayan Heli Services Pvt. Ltd. Page no. 13 of 47 Aeronautics Limited, Bangalore worth USD $ 100,000, which further constitutes the plaintiff's capital contribution in the defendant no.1 company. The defendants have therefore, deliberately refused/neglected to perform their part of the obligations with the sole intention of misappropriating the plaintiff's legitimate share in the business of the defendant no.1 apart from the helicopters, spare parts and cost of ongoing repairs.
17. Due to unlawful and illegal conduct of the defendants, the plaintiff was unable to conduct the last heliskiing seasons in 2007-2008 and 2008-2009, resulting in tremendous financial losses to the plaintiff, which cannot be computed. Further, precious foreign exchange earnings will be lost if the plaintiff is not provided with unrestricted access to the helicopters to conduct its heliskiing operations, apart from equity shares in the defendant no.1 company proportionate to its overall contributions and investments in the defendant no.1 company. The heliskiing operations in Manali are conducted only in the winter months during November-March every year. However, the helicopters are also freely being used by the defendants during the off-season period from April to October for several other activities, including for conducting the 'Amarnath Yatra' as advertised by the defendant no.1 in its website and other publicity materials without the prior consent or approval of the plaintiff. Even during off-season, the defendant no.1 is earning substantial revenues which cannot be computed or quantified by the plaintiff. The plaintiff would ordinarily have been entitled to Old Suit No.CS (OS) 348/2009 New CS DJ 242/2020 Himachal Helicopter Skiing Pvt. Ltd. v. Himalayan Heli Services Pvt. Ltd. Page no. 14 of 47 their proportionate share of such revenues, including profits and dividends had the defendant transferred/issued/allotted the equity shares to the plaintiff in the defendant no.1 company, as was originally agreed upon between the parties.
18. From the very commencement of their business relationship, the plaintiff has found that the defendants have not been very forthcoming nor transparent, especially on financial and other issues with the plaintiff, and the plaintiff has been deliberately kept in the dark about the activities and earnings of the defendant no.1. Further, the current balance sheets and accounts of the defendant no.1 are being deliberately withheld and are not being filed, including with the Registrar of Companies. The plaintiff's investigations have revealed that defendant no.1 has also issued substantial equity shares (999,998 nos.) at a discount, without the Company Law Board's ("CLB") permission, which is required for issue of shares at a discount greater than 10%. This establishes that the defendants have not contributed anything towards the capitalization of the assets of the defendant no.1 at all are not financially sound and are nevertheless holding 100% equity in defendant no.1 without any justification, while denying the plaintiff their shareholding without any basis, despite the plaintiff's obvious substantially higher overall contributions and investments in the defendant no.1 company. Defendant no.1 has not completed the formalities in this regard and there is no record with the ROC of the notice required under law that should have been given by the defendant no.1 in Form 21 regarding the order of the CLB. Therefore, the Old Suit No.CS (OS) 348/2009 New CS DJ 242/2020 Himachal Helicopter Skiing Pvt. Ltd. v. Himalayan Heli Services Pvt. Ltd. Page no. 15 of 47 financial stability of the defendant no.1 is itself suspect and unclear, particularly if any misrepresentations have deliberately been made by it.
19. The unlawful conduct of the defendants in not issuing/allotting/transferring the equity shares to the plaintiff has caused irreparable loss, harm and injury to the plaintiff's goodwill and reputation and cannot be assessed monetarily by the plaintiff. The defendants have been riding piggy-back on the original efforts of the plaintiff and are reaping the benefits of the helicopter operations for itself alone. The plaintiff was induced into investing heavy amounts for the purchase of the helicopters, spare parts, repairs, including rendering very valuable consultancy services to the defendants, which constitutes its equity subscription in the defendant no.1 company. Plaintiff is now permitted to take upto 100% equity shares to the defendant no.1 company as per the Reserve Bank of India's Notifications bearing No.FEMA.179/2008-RB dated 22.08.2008. It is therefore, imperative that a share valuation be conducted in accordance with the manner prescribed under the Foreign Exchange Management (Transfer of Issue of Security to a Person Resident Outside India) Regulations, 2000 and the plaintiff be issued/allotted equity shares in the defendant no.1 company to the extent of its overall investments and contributions already made in the defendant no.1 company to date.
20. Plaintiff has rendered valuable consultancy services including helicopter operations, fuel handling, marketing, ground Old Suit No.CS (OS) 348/2009 New CS DJ 242/2020 Himachal Helicopter Skiing Pvt. Ltd. v. Himalayan Heli Services Pvt. Ltd. Page no. 16 of 47 operations, communications systems, group management, ground safety, engineering support, inventory storage and management, flight planning and consultancy on numerous other subjects including technical consultancy, marketing, publicity support, advertisement, management and supervision to the defendant no.1 company which the plaintiff estimates to be USD $ 987,000 and which the plaintiff is entitled to under A.P(DIR Series) Circular No.46 dated 30.04.2007.
21. The defendants are now legally bound to issue/allot/transfer the requisite equity shares in the defendant no.1 company to the plaintiff in proportion to the plaintiff's overall investments and contributions already made in the defendant no.1 company. The defendants have themselves already admitted on oath that they had "working relations with the plaintiff and that they used to arrange all the ground work including airport transfers, hotel arrangement, arranging various kinds of adventure activities, taking on lease helicopters and making all kinds of provisions during the stay of the clients" of the plaintiff vide affidavit filed in CS(OS) No.205/2009 pending before this court. The admission on oath by the defendants further establishes and strengthens the case of the plaintiff that the defendants are bound to issue/allot/transfer equity shares in the defendant no.1 company in lieu of the plaintiff's overall capital contributions and other investments made in the defendant no.1 company to date. The plaintiff at no point of time condoned or acquiesced in the said unlawful conduct of the defendants. To the contrary, the plaintiff has repeatedly asserted Old Suit No.CS (OS) 348/2009 New CS DJ 242/2020 Himachal Helicopter Skiing Pvt. Ltd. v. Himalayan Heli Services Pvt. Ltd. Page no. 17 of 47 its rights, which the defendants have never denied nor contested.
22. The unlawful conduct of the defendants in not issuing, allotting or transferring the equity shares to the plaintiff proportionate to the plaintiff's overalls investments and contributions in the defendant no.1 company to date has caused irreparable loss, harm and injury to the plaintiff's goodwill and reputation and cannot be assessed monetarily by the plaintiff. The monetary damage is estated at Rs.20 lakhs which the defendant is liable to pay. Therefore, the plaintiff is constrained to file the present suit seeking inter alia, a decree of permanent mandatory injunction, damages and rendition of accounts directing the defendants to conduct a share valuation in the manner provided under the Foreign Exchange Management Act, 1999 and rules and regulations made thereunder and issue/allot/transfer proportionate equity shares in the defendant no.1 company to the plaintiff to the extent of overall investments and contributions in defendant no.1 company made to date.
23. Written statement was filed on behalf of defendants wherein the defendants disputed and denied the contents of plaint. The defendants have taken preliminary objections that the present suit is an abuse of process law, plaintiff has no right, title or interest in the defendant no.1 company. There is no contract between the plaintiff or the defendants with regard to investment and issuance of equity shares to the plaintiff. The entire plaint is wholly vague and deliberately confused on this. It is submitted that for any valid contract there must be 'concensus ad idem' on Old Suit No.CS (OS) 348/2009 New CS DJ 242/2020 Himachal Helicopter Skiing Pvt. Ltd. v. Himalayan Heli Services Pvt. Ltd. Page no. 18 of 47 all material particulars, including percentage, price, time, areas of management, rights of parties etc. In the present case, all material particulars are missing, there is no ' concensus ad idem' and there no agreement between the parties on any aspect.
24. The suit is mis-conceived and untenable and is barred by law. Defendant no.1 is an aviation company and investments cannot be made in an aviation company without various prior approvals, security clearance etc., which in the case of foreign nationals are extremely stringent. The Ministry of Civil Aviation, in exercise of its powers has framed the "Civil Aviation Requirements Section 3 air Transport Series C Part III". Clause 9 of the Civil Aviation requirements Section 3 air transport Series C Part III dated 31.03.2003 prohibits any change in the equity shareholdings or in the composition of the Board of any aviation company, without the prior approval and clearance from the Ministry of Civil Aviation. Admittedly, no such prior approval or permission has ever been sought or obtained.
25. The plaintiff's claim is void and impermissible, being beyond the objects prescribed in its Memorandum of Association. The objects of the plaintiff do not permit or provide for it to be in the aviation business and for that reason alone, the present suit be dismissed as not maintainable. The claims of the plaintiff is barred by limitation, delay and laches. The company was formed in 1998. It is too late for the plaintiff to now seek allotment of shares in defendant no.1. In any event, the plaintiff never came forward to enter into any contract to purchase shares right upto Old Suit No.CS (OS) 348/2009 New CS DJ 242/2020 Himachal Helicopter Skiing Pvt. Ltd. v. Himalayan Heli Services Pvt. Ltd. Page no. 19 of 47 2004. In any event in 2005 in no uncertain terms it was made clear to the plaintiff that it was not possible to work together in a joint venture with the plaintiff and they would not be entitled to any shareholding in defendant no.1 and that this chapter is closed.
26. The plaintiff's case is not only misconceived in law it is in fact replete with false statements. The plaintiff has falsely stated that vide agreement dated 15.03.1999, the plaintiff company acquired exclusive rights to conduct heliskiing operations. In fact, the correct position in this regard is that pursuant to agreement dated 15.03.1999 Greater Himalayan Outdoors Pvt. Ltd. (in which defendant no.4 is a 50% shareholder) was granted the rights to conduct heliskiing operations. Plaintiff has falsely stated that the defendants have no rights in the heliskiing license/business by the Himachal Govt., whereas the defendant no.4 owns 50% shares in Greater Himalayan Outdoors Pvt. Ltd., which holds the license for conducting heliskiing. Plaintiff has falsely stated that it owns the heliskiing license whereas the plaintiff is not even a shareholder in Greater Himalayan Outdoors Pvt. Ltd. The shareholder is Wester Himalaya Pvt. Ltd., which the defendants verily believe, has been taken over by some third party. The same is concealed by the plaintiff. In Para 10 of its plaint, the plaintiff has stated that plaintiff had made various payments for purchase of 2 helicopters for defendant no.1 company, which is false. The payments were made to Air Zermatt (as is evident from the documents filed) towards purchase of helicopter in the name of the plaintiff company for Old Suit No.CS (OS) 348/2009 New CS DJ 242/2020 Himachal Helicopter Skiing Pvt. Ltd. v. Himalayan Heli Services Pvt. Ltd. Page no. 20 of 47 itself and not for or on behalf of defendant no.1 company. The plaintiff company has no expertise in the aviation industry and the promoter of the plaintiff company i.e. Mr. Roderick Meckanzine is a school drop out and has no education qualification, training or knowledge on aviation business. Plaintiff has falsely stated that defendant no.1 company owns six helicopters whereas the defendant no.1 owed four helicopters at the time of filing of present suit. The defendant no.1 has subsequent to the filing of the case inducted another helicopter on 12.03.2009. Plaintiff falsely stated in Para 16 of its plaint that plaintiff company entered into sale and purchase agreements for purchase of helicopters on behalf of defendant no.1 company. The prayers made by the plaintiff are not in public interest or in the interest of the Company.
27. The defendant nos. 2 and 3 are both recognized and respected figures in their industry, being pioneer in the field of adventure tourism in India. Defendant no.2 is an acclaimed mountaineer and has been actively associated and involved with adventure tourism since 1979. Defendant no.3 is pioneer in river rafting and a trained skier and mountaineer has involved in adventure tourism since 1978. Defendant nos. 2 & 3 got together to do business and formed defendant no.4 in the year 1987. In 1989-90 the plaintiff/Mr. Roderick Mackenzie contacted defendant no.2 to 4 and requested them to help in starting heliskiing operations in India. At that point of time, heli skiing was only being conducted in India by one Soudan, a French National and a world acclaimed skier under the name and style of Old Suit No.CS (OS) 348/2009 New CS DJ 242/2020 Himachal Helicopter Skiing Pvt. Ltd. v. Himalayan Heli Services Pvt. Ltd. Page no. 21 of 47 M/s Himalayan Heli ski. Mr. Soudan's operations were limited to Kashmir. Defendant nos. 2 to 4 helped the plaintiff to start its heliskiing operations in India and continued to provide them support services. Defendant no.4 entered into a working arrangement with the plaintiff and helped the plaintiff to organize tours for heliskiing as part of the business. The plaintiff changed the name of its operations to Himachal Helicopter skiing. Pursuant to incorporation, defendant no.1 started an establishment and did all the spade work necessary for making an application to the Ministry of Civil Aviation to get necessary permissions, approvals and clearances for providing "None- Schedule Air Tax Operations". The application was made in 1999 by defendant no.1, which mentioned that some of the revenues would be generated by it from the services to be provided by it to the plaintiff, the Ministry of Civil Aviation addressed a specific query as to whether the plaintiff had any interest in defendant no.1. Needless to say the plaintiff, as was the position, affirmed that it had no interest in defendant no.1. This was in 1999 itself.
28. The current paid up capital of defendant no.1 is Rs.2 crores all of which has been paid up and subscribed by defendant no.4. The plaintiff has not made any financial investment or financial contributions whatsoever, in defendant no.1 or defendant no.4, nor have defendant no.2 and 3 received any form of financing or loan from the plaintiff. Any and all assets created either by defendant no.1 or defendant no.4 have been created by them out of their own internal accruals and borrowings from the Banks.
Old Suit No.CS (OS) 348/2009 New CS DJ 242/2020 Himachal Helicopter Skiing Pvt. Ltd. v. Himalayan Heli Services Pvt. Ltd. Page no. 22 of 47 All the five helicopters owned by defendant no.1 were purchased by defendant no.1 under valid and legal agreements and all payments for such purchases have been made by defendant no.1. Not a single penny has been paid by the plaintiff or any of its promoters towards the acquisition of any of the helicopters or other assets belonging to defendant no.1. The plaintiff has made deliberate, vague and false statement to the contrary. The defendants have also placed on record a certificate from the statutory editors certifying the above position.
29. The relations between defendant nos. 2 and 3 and the promoters of the plaintiff were good and in 1998, the plaintiff / its promoters and defendant nos. 2 to 4 decided to form a tourism joint venture in the name and style of Greater Himalayan Outdoors Pvt. Ltd., wherein defendant nos. 2 to 4 were 50% shareholders. It was only in the year 2000, the plaintiff/its promoters, for the first time, expressed an interest in being a part of defendant no.1. The defendants, given the old and good relations the parties enjoyed, at that time, was open to idea of considering the plaintiff becoming a shareholder in defendant no.1 subject to agreement, full compliance with all rules, regulations and guidelines in relation to equity participation in an aviation company. The guidelines, at that time, only permitted foreign equity participation to the extent of 40% and that too subject to all approvals and clearances. However, the plaintiff / its promoters wanted a 50% holding, which Indian Laws did not permit and while the defendants given their old relationship and given their recent 50:50 joint venture in Greater Himalayan Old Suit No.CS (OS) 348/2009 New CS DJ 242/2020 Himachal Helicopter Skiing Pvt. Ltd. v. Himalayan Heli Services Pvt. Ltd. Page no. 23 of 47 Outdoors Pvt. Ltd. were at that time, principally not opposed to considering it, subject to agreement etc., they pointed out that the same was neither possible nor permissible given the extant applicable laws, rules and regulations, which did not permit foreign equity in excess of 40%. Plaintiff was not interested in a 40% equity holding and consequently, neither applied for permission, nor for allotment of shares, nor did the parties come down to valuations etc. at which the shares, if any, were to be allotted to the plaintiff. Even when the foreign equity participation was permitted upto 49%, the plaintiff did not come forward, made no plaint for permission, approvals and clearances, nor discussed the price at which shares could be allotted to it. Thus the matter became a closed chapter. Plaintiff did not have funds and was neither ready nor willing to purchase shares in defendant no.1. In fact the defendant verily believe that the plaintiff was on the verge of bankruptcy in this period. Illustratively, there was no agreement as to price, percentage of shareholdings, whether shares would be sold by defendants no.4, whether shares would be freshly allotted by defendant no.1 etc., nor was there any agreement as to management control or any inter se agreement between the parties with regard to the management structure of the company.
30. The parties formed GHO in 1998. Defendant no.2 to 4 informed the plaintiff that it was not possible to continue in this manner and also stopped devoting time and giving business to GHO. The accounts of GHO have till date not been settled, despite several attempts by defendants no.2 to 4. The defendants Old Suit No.CS (OS) 348/2009 New CS DJ 242/2020 Himachal Helicopter Skiing Pvt. Ltd. v. Himalayan Heli Services Pvt. Ltd. Page no. 24 of 47 still continued to do business with the plaintiff purely on commercial terms and till 2004 personal relations remained good. However, in the latter part of 2004, the relationship became strained and harsh words came to be exchanged between the parties. Though the commercial relations continued and in 2006 even that came to an end. In 2006, the defendant had a serious dispute with the plaintiff and Mr. Roderick Mackenzie as they used the defendant's helicopter to lift loads, which the licence of the answering defendant did not permit, knowing fully well that this constituted a violation of the defendant's license terms. The plaintiff's organization, on realizing that their wrongful act had been discovered, sought to tender a written apology. The defendant stopped dealing with the plaintiff in the year 2006 itself. The defendants have had no commercial dealings with the plaintiff after April, 2006 and the plaintiff owes an amount of approximately US Dollars 36,000 to defendant no.4 for services rendered. The case of the plaintiff is false and fradulent and the suit is only a desperate gamble and attempt to unjustly enrich themselves. The suit is malafide and seeing the defendants' success, the plaintiff is only trying to grab the hard earned business and assets of the defendants. In para-wise reply on merits, the averments made in the plaint have been denied. Hence, it is prayed that suit of the plaintiff be dismissed.
31. In the Replication, the plaintiff has denied the contents of the Written Statement. Plaintiff has reiterated & reaffirmed the contents of the plaint. The plaintiff has stated that the defendants have filed their written statement much beyond the statutory Old Suit No.CS (OS) 348/2009 New CS DJ 242/2020 Himachal Helicopter Skiing Pvt. Ltd. v. Himalayan Heli Services Pvt. Ltd. Page no. 25 of 47 period of 30 days as provided under Order VIII Rule 1 of CPC and have also failed to make out any ground whatsoever, in their application for condoning the delay of 51 days in filing their written statement. Further, the defendants in their written statement have deliberately misrepresented facts, made false statements on oath, grossly suppressed material particulars. The defendants have blatantly on oath deliberately made false statements and suppressed material particulars that the plaintiff has not made any financial contributions/investments in the defendant no.1 company. A perusal of the enclosed balance sheets of the defendant no.1 for the financial years 2002-2003 in the column "OTHER LIABILITIES" clearly shows a sum of Rs.8,725,700 as a "liability" payable and owing to the plaintiff. The plaintiff is in fact entitled to covert at the very least, the above sum of Rs.8,725,700/- into equity shares in the defendant no.1 company under the Foreign Exchange Management (Transfer or Issue of Security to a Person Resident Outside India) Regulations, 2000. Plaintiff has denied all the other averments made in the written statement.
32. It is pertinent to mention here that during admission-denial of the documents, defendants admitted three documents of plaintiff company and the same are exhibited as Ex.P1 to P3 i.e. E-mail dated 13.01.2009, Letter dated 08.08.2006 sent on behalf of defendant no.4 & letter dated 02.02.2007 sent on behalf of defendant no.4 but same are not relied upon by the plaintiff company during tendering its evidence by way of affidavit Old Suit No.CS (OS) 348/2009 New CS DJ 242/2020 Himachal Helicopter Skiing Pvt. Ltd. v. Himalayan Heli Services Pvt. Ltd. Page no. 26 of 47 Ex.PW1/A.
33. It is further pertinent to mention here that during admission-denial of the documents, plaintiff company admitted documents of defendants from D1 to D50 but defendants have not relied upon the following documents during tendering their evidence by way of affidavit Ex.DW1/A which are as follows:
D3 (Letter dated 26.07.1990), D4 (Letter dated 04.08.1990), D5 (Letter dated 21.04.1993), D6 (01.09.1998), D7 (Letter dated 04.04.2006), D8 (Letter dated 24.03.2005), D9 (Company Master Details of defendant no.1 company), D10 (List of 2009 Trips & Prices of plaintiff company), D12 (Letter dated 30.01.2003), D14 (Letter from Civil Aviation Department to defendant no.1 dated 05.08.2004), D15 (Letter dated 05.03.1999 for grant of NOC from defendant no.1 company), D16 (Guidelines for foreign equity participation in the Domestic Air Transport Sector), D18 (Guidelines for foreign equity participation in the Domestic Air Transport Sector), D19 (Letter dated 29.09.2004 from defendant no.2), D20 (E-mail dated 28.09.2004 from defendant no.2), D23 (E-mail dated 17.09.2005 to defendant no.2), D24 (E-mail dated 30.09.2005), D25 (E-mail dated 14.10.2005 from defendant no.2), D26 (E-mail dated 15.10.2005), D27 (E-mail dated 18.10.2005), D28 (E-mail dated 13.10.2005), D29 (E-mail dated 19.10.2005), D30 (E-mail dated 16.11.2005), D31 (E-mail dated 18.11.2005), D32 (E-mail dated 29.11.2005), D33 (E-mail dated 30.11.2005), D34 (E-mail dated 01.12.2005), D35 (E-mail dated 03.12.2005), D36 (E-mail dated 05.12.2005), D37 (E-mail dated 06.12.2005), D38 (E-mail dated 07.12.2005), D39 (E-mail dated Old Suit No.CS (OS) 348/2009 New CS DJ 242/2020 Himachal Helicopter Skiing Pvt. Ltd. v. Himalayan Heli Services Pvt. Ltd. Page no. 27 of 47 09.01.2006), D40 (E-mail dated 14.03.2006), D41 (E-mail dated 14.03.2006), D42 (E-mail dated 15.03.2006), D43 (E-mail dated 16.03.2006), D44 (E-mail dated 16.03.2006), D45 (E-mail dated 17.03.2006), D46 (Letter dated 09.08.2006), D47 (Letter dated 16.08.2006), D48 (Letter dated 16.07.2007), D49 (Letter dated 19.07.2007) & D50 (Letter dated 16.07.2007).
34. From the pleadings of the parties, the following issues were framed on 09.09.2014 by Hon'ble High Court of Delhi. (Present suit was transferred to this Court in terms of the Notification No.27187/DHC/Orgl. Dated 24.11.2015). ISSUES:
1. Whether the plaintiff is entitled to a decree of mandatory injunction directing the defendants to issue, allot and / or transfer equity shares in the defendant company to the plaintiff? OPP
2. Whether the plaintiff is entitled to any damages from the defendant? If so, to what extent? OPP
3. Whether the plaintiff suit is liable to be dismissed for want of any cause of action against the defendant? OPD
4. Whether the present suit is liable to be dismissed as being barred by law? OPD
5. Whether the plaintiff is guilty of having approached this Court with unclean hands? If so, its effect? OPD
6. Whether the suit is barred by limitation, delay and latches? OPD
7. Whether the defendant no. 1 or its Directors entered into a joint venture agreement with the plaintiff by signing the Heads of Agreement dated 27.03.2003 and Minutes of Old Suit No.CS (OS) 348/2009 New CS DJ 242/2020 Himachal Helicopter Skiing Pvt. Ltd. v. Himalayan Heli Services Pvt. Ltd. Page no. 28 of 47 Meeting? If yes, its effect? OPP
8. Whether the defendant no. 1 or its Directors were bound to issue and allot equity shares in the defendant no. 1 company to the plaintiff in proportion to the overall investments made by the plaintiff in accordance with the then prevailing Foreign Direct Investment Policy of the Government of India? OPP
9. Relief, if any.
35. In support of its evidence, the plaintiff examined one witness.
36. PW-1, Sh. Roderick Mackenzie, tendered his evidence by way of affidavit Ex.PW1/A and reiterated and reaffirmed the contents of the plaint in his affidavit. He has relied upon following documents:
1. Ex. P1/1 and Ex.P1/2 Board Resolution and Special Power of Attorney dated 30.05.2008.
2. Mark P1/3 (colly) Certificate of Incorporation Memorandum of Association & Articles of Association.
3. Mark P1/4 Letter dated 23.08.1988 issued by Govt. of India, Department of Environment, Forests and Wildlife.
4. Mark.P1/5 Copy of Agreement dated 07.09.1988.
5. Ex.P1/6 Copy of e-mail dated 04.05.2000 Old Suit No.CS (OS) 348/2009 New CS DJ 242/2020 Himachal Helicopter Skiing Pvt. Ltd. v. Himalayan Heli Services Pvt. Ltd. Page no. 29 of 47 (objected to regarding mode of proof and admissibility)
6. Mark P1/7 (colly) Wire telex dated 30.11.2000 and 21.12.2000.
7. Mark P1/8 Sale and Purchasing Contract with aviation companies for purchase of helicopters on behalf of defendant no.1.
8. Mark P1/9 Sale and Purchase Agreement.
9. Ex.P1/10 (colly) E-mails dated 18th& 19th October 2005(objected to the regarding mode of proof and admissibility)
10. Ex.P1/11 E-mail dated 03.12.2005.
(objected to the regarding mode of proof and admissibility)
11. Mark P1/12 (colly) Minutes of Meeting dated 26.03.2003 and 27.03.2003.
12. Ex.P1/13 E-mail dated 27.08.2004.
(objected to the regarding mode of proof and admissibility)
13. Mark P1/14 E-mail dated 28.09.2004.
(objected to the regarding mode of proof and admissibility)
14. Ex.P1/15 E-mail dated 20.10.2004 (objected to the regarding mode of proof and admissibility).
15. Ex.P1/16(colly) E-mails dated 13.10.2005, (Pages 186-191) 14.10.2007, 17.10.2005, 21.02.2006 and 23.02.2006 (objected to the regarding Old Suit No.CS (OS) 348/2009 New CS DJ 242/2020 Himachal Helicopter Skiing Pvt. Ltd. v. Himalayan Heli Services Pvt. Ltd. Page no. 30 of 47 mode of proof and admissibility)
16. Mark P1/17 Heads of agreement concerning (Page 159-171) GHO Pvt. Ltd. HHS Pty Ltd., HHS Pvt. Ltd.
memorandum of understanding
17. Ex.P1/18 E-mail dated 09.11.2005 (objected to the regarding mode of proof and admissibility).
18. Ex.P1/19 E-mail dated 15.11.2005 (objected to the regarding mode of proof and admissibility).
19. MarkP1/20 (Colly) Letters dated 09.08.2006 and 16.08.2006.
20. Mark P1/21 E-mails dated 31.01.2002 & Ex.PW1/22 & email dated 06.11.2004.
(objected to the regarding mode of proof and admissibility)
21. Ex.P1/23 E-mail dated 18.08.2005 (objected to the regarding mode of proof and admissibility)
22. Mark P1/24(colly) Letters to Hon'ble Ministry of Civil Aviation, the Hon'ble Ministry of Tourism and Principal Secretary of Tourism, Govt. of Himachal Pradesh.
23. Ex.P1/25 E-mail showing Plaintiff purchased and provide finance for repair of the helicopters used by defendant no.1.
(objected to the regarding mode of proof and admissibility) Old Suit No.CS (OS) 348/2009 New CS DJ 242/2020 Himachal Helicopter Skiing Pvt. Ltd. v. Himalayan Heli Services Pvt. Ltd. Page no. 31 of 47
24. Ex.P1/26 E-mail showing the Plaintiff's legitimate share in the business of defendant no.1, apart from the helicopters, spare parts and costs of ongoing repairs.
(objected to the regarding mode of proof and admissibility)
25. Mark P1/27 E-mail dated 19.07.2006
26. Ex.P1/28 Reply to defendant no.2 vide e-
mail dated 07.02.2004 (objected to the regarding mode of proof and admissibility)
27. Ex.P1/29 RBI Notification.
No other witness has been examined by the plaintiff and PE was closed vide order dated 20.09.2018.
37. In its defence, the defendant company examined only one witness.
38. DW-1, Sh. Harsh Vardhan Sharma tendered his evidence by way of affidavit Ex.DW1/A and reiterated and reaffirmed the contents of the Written Statement in his Evidence by way of Affidavit. He has relied upon following documents:
1. Ex. DW1/1 Board Resolution passed by defendant no.1.
2. Ex. DW1/2 Board Resolution passed by defendant no.4.
3. Ex. D-1 Memorandum of Articles of Association of defendant no.4.
4. Ex.D-2 Memorandum of Articles of Old Suit No.CS (OS) 348/2009 New CS DJ 242/2020 Himachal Helicopter Skiing Pvt. Ltd. v. Himalayan Heli Services Pvt. Ltd. Page no. 32 of 47 Association of defendant no.1.
5. Ex.DW1/3 Dainik Jagran newspaper dated 30.08.2011.
6. Ex.DW1/4 Punjab Kesri newspaper.
7. Ex.DW1/5 Amar Ujala newspaper dated 30.08.2011.
8. Ex.DW1/6 E-mail dated 04.10.2007.
9. Mark DW1/7 Application for grant of NOC.
(Ex.DW1/7 as per affidavit de-
exhibited)
10. Mark DW1/8 Guidelines issued from the office (Ex.DW1/8 as of Director General of Civil per affidavit de- Aviation.
exhibited)
11. Ex.DW1/9 Certificate dated 25.02.2009 of Auditor namely A.V Ravindranath & Co.
12. Ex.DW1/10 The sale invoice and agreement (colly) (OSR) to sale and purchase dated 27.09.2003.
13. Ex.DW1/11 The sale invoice and agreement (OSR) to sale and purchase dated 13.09.2004.
14. Ex.DW1/12 The agreement to sale and (colly)(OSR) purchase dated 10.11.2004.
(running into 10 pages).
15. Ex.DW1/13 The agreement to sale and (colly) (OSR) purchase dated 05.06.2007 Old Suit No.CS (OS) 348/2009 New CS DJ 242/2020 Himachal Helicopter Skiing Pvt. Ltd. v. Himalayan Heli Services Pvt. Ltd. Page no. 33 of 47 (running into 4 pages)
16. Ex.DW1/14 Civil Aviation Requirement, (running into 20 Section 3 Air Transport Series 'C' pages) Part-III dated 08.10.1999.
17. Ex.DW1/15 Certificate under Section 65-B of Indian Evidence Act.
18. Ex.D11 Certificate issued showing change of name of plaintiff company.
19. Ex.D13 Letter dated 19.05.1999
20. Ex.D17 Letter dated 15.06.1999 21 Ex.PW1/D1 Certificate issued by CA M/s Ravindranath & Co.
22. Ex.D21 Letter dated 06.11.2004.
23. Ex.D22 Letter dated 17.09.2005.
39. This court has heard the arguments addressed by Ld. Counsels for parties. Written submissions filed on behalf of both the parties. Record perused carefully.
40. Issue-wise findings are as under:
ISSUES No.1, 2, 7 & 8:
a). These issues are interconnected, hence, taken together.
Burden to prove these issues was on the plaintiff company. Plaintiff company examined Sh. Roderick John Andrew Mackenzie, Director of plaintiff company as PW1. He tendered his evidence by way of affidavit Ex.PW1/A and deposed in Old Suit No.CS (OS) 348/2009 New CS DJ 242/2020 Himachal Helicopter Skiing Pvt. Ltd. v. Himalayan Heli Services Pvt. Ltd. Page no. 34 of 47 consonance with the contents of the plaint.
b). During his cross-examination he deposed that he is not carrying any business in India since the date of filing of the present suit and he did not file Income Tax Returns in India. He further deposed that he does not know when was the defendant no.1 company was incorporated. He admitted that he was not involved directly or indirectly into the incorporation of defendant no.1 company. He deposed that he is not sure of the exact month and year when the discussions regarding alleged understanding for transfer of shares were initiated between the parties. He admitted that defendant no.1 never sent any return offer to the plaintiff company or to him for subscription of its shares. He deposed that he had written letters to the defendant no.1 company asking it to allocate its shares to the plaintiff company. He again said his lawyer had written letters to the defendant no.1 under his instructions but he cannot say if he had filed said written letters on the Court record. He admitted that 49% equity shares as stated in his affidavit in paragraph 8 is not based upon any valuation done by a qualified Charted Accountant. The discussions regarding alleged 49% equity shares occurred between the parties from the year 1999 till about 2004 and he has specified about 49% shares in his plaint. Witness was confronted with the plaint where it is not so recorded, in reply he admitted that in the year 1999 there was a restriction by the Government of India on foreigners and foreign entities to hold more than 40% share in any aviation company incorporated in India. He further admitted that there could not have been any agreement for transfer of 49% Old Suit No.CS (OS) 348/2009 New CS DJ 242/2020 Himachal Helicopter Skiing Pvt. Ltd. v. Himalayan Heli Services Pvt. Ltd. Page no. 35 of 47 equity shares to the plaintiff due to legal prohibitions, however, it was a buzz in the business that the law would change and there was an understanding between the plaintiff company and defendants that defendant no.1 shall transfer 49% equity shares to the plaintiff company as and when the law will change.
c). He further deposed that there was no discussion between plaintiff company and defendants regarding price of shares that will be transferred. No written agreement was executed between the plaintiff and defendants regarding alleged sale of 49% equity shares. Nowhere in plaint plaintiff stated that he is entitled to 49% share in defendant no.1 company. It is settled principle of law that evidence which is led beyond pleadings is liable to be ignored. Hence, same cannot be taken into consideration while appreciating evidence led by the parties. PW1 further deposed he is not aware of any Board meeting of the Board of Directors of defendant no.1 company where in the issue of alleged allotment of shares to the plaintiff company was discussed and he further admitted that he is not aware of any exact general meeting and/ or meetings of the share holder of defendant no.1 company where in the issue of alleged allotment of shares was discussed and he did not apply with any Department with Government of India seeking permission for purchase of shares in the defendant no.1 company. He further deposed that he did not make any request at any point of time to the defendants for induction of a nominee of the plaintiff company as a director on the board of defendant no.1 company. He further deposed that plaintiff company is maintaining proper books of accounts in the usual course of its Old Suit No.CS (OS) 348/2009 New CS DJ 242/2020 Himachal Helicopter Skiing Pvt. Ltd. v. Himalayan Heli Services Pvt. Ltd. Page no. 36 of 47 business but he has not placed on record the books of accounts maintained by the plaintiff company in the present proceedings.
d). In answer to the question put by the Ld. Counsel for defendants whether plaintiff company placed on record any evidence of any payments made by the plaintiff company from its bank account to the bank accounts of defendant no.1 company, PW1 has not answered this question affirmatively rather he stated that Sh. Harsh was very insistent that share payment must not appear in transfer description of the telegraphic transfer request. No payment with an annotation of share payment was made and he further deposed that he has not mentioned in plaint that Sh. Harsh had insisted that share payments must not appear in the transfer description. He deposed that there is no authority letter issued by the defendant no.1 company in his favour to attend the meetings with officials of DGCA and minutes of meetings with official of DGCA were not recorded in writing. He further deposed that there is no written agreement in respect of providing services of valuable technical consistency, marketing, publicity spot, advertisement, management and supervision to the defendant no.1 company and there are no invoices and/ or payment made to any third party therefore, there are no documentary evidence with regard to these services and he did not make any claims in respect of services provided and did not raise any invoices because he was acting as a shareholder does and provided services to benefit his presumptive shareholding.
e). He further deposed that he does not have document to show that two cars i.e. one Gypsy and one Bolero car were Old Suit No.CS (OS) 348/2009 New CS DJ 242/2020 Himachal Helicopter Skiing Pvt. Ltd. v. Himalayan Heli Services Pvt. Ltd. Page no. 37 of 47 purchased by him and transferred to defendant no.1 company. PW1 admitted that there was no agreement regarding claim of US $ 987000/- made by him regarding valuable technical consistency, marketing, publicity spot, advertisement, management and supervision to the defendant no.1 company as mentioned in paragraph 43 of his evidence by way of affidavit Ex.PW1/A. He further deposed that he has claimed amount of US $ 987000/- based on the turn over of defendant no.1 company during the period of election flying in 2002 and 2003 and the Amar Nath flying which all used communication on fueling equipment, staff and systems from the plaintiff company. He has admitted that he has not placed any evidence on record in respect of this claim and he does not have formula to arrive at this figure of US $ 987000/-.
f). PW1 deposed that there is no document specifically showing that gear box and other spare parts were fitted to the helicopters owned by the company. PW1 admitted that in the year 2006 the business dealings between the plaintiff and defendant company came to an end. He further admitted that plaintiff company did not own any helicopters in its own name during the period 2005 to 2007. PW1 admitted that payments mentioned in para no.12 of affidavit i.e. Payments vide wire telex dated 30.01.2000 and 21.12.2000 paid sums of CHF442, 250 and USD $ 276000 were not made to any of the defendants. He further deposed that he has not placed on record certified copy of bank statement certified by plaintiff's banker evidencing that above payments were made by the plaintiff company to any of Old Suit No.CS (OS) 348/2009 New CS DJ 242/2020 Himachal Helicopter Skiing Pvt. Ltd. v. Himalayan Heli Services Pvt. Ltd. Page no. 38 of 47 the defendants. He admitted that there is no document filed on record by the plaintiff company which shows that helicopters were transferred in the name of defendant company by the plaintiff company. He denied that helicopter VT-EJS was purchased by the plaintiff company. He further replied that plaintiff company provided the funds for purchasing the helicopter in 2004-05 and the payments were made to Hindustan Aeronautics for purchase of helicopter VT-EJS. He further deposed that defendant company purchased helicopter VT-EJS from Reliance Travel & Transport and plaintiff company have not made any payment to Reliance Travel & Transport for the purchase of this helicopter. He admitted that plaintiff company did not pay either to defendant no.1 company or to Reliance Travel & Transport for purchase of this particular helicopter because foreign companies could not at that time buy Indian aircrafts to keep on Indian register. He admitted that helicopter VT-EJS was purchased by the defendant no.1 company for a sum of Rs.55,00,000/- from Reliance Travel & Transport entirely out of accruals and was not purchased through contribution or payment from any foreign entity. He further admitted that helicopter VT-EDT was purchased by defendant no.1 company from Government of Maharashtra in the year 2004 for a sum of Rs.51,00,000/-. He further admitted that helicopter VT-ERR was purchased in the year 2007 from Jagson Airlines Limited and he admitted that plaintiff company has not made any payment directly to Government of Maharashtra or to Jagson Airlines for the purchase of these helicopters and helicopter purchased from Old Suit No.CS (OS) 348/2009 New CS DJ 242/2020 Himachal Helicopter Skiing Pvt. Ltd. v. Himalayan Heli Services Pvt. Ltd. Page no. 39 of 47 Government of Maharashtra with the funds generated from Heli Skiing Advance Booking. He further admitted that helicopter VT- WEX Burner Obelander Helikopter AG in respect of Lama 315B S/N 2679 was purchased by defendant no.1 from Bohag, AG, Switzerland.
g). On the other hand, defendants examined DW1 Sh. Harsh Vardhan Sharma as DW1. He tendered his evidence by way of affidavit Ex.DW1/A. During cross-examination he deposed that he is the founder, promoter and director of defendant no.1/ Himalayan Heli Services Pvt. Ltd. He along with Mr. Wangchuk Shamshu are the directors of defendant no.1 company. Defendant no.1 company is 100% subsidiary of World Expeditions (India) Pvt. Ltd./ defendant no.4 and defendant no.1 company was incorporated in the year 1998. He admitted that he met Mr. Roderick John Andrew Mackenzie for the first time in a Mountaineering Conference held in New Delhi in 1985. He deposed that no agreement was signed with the plaintiff company for the business corporation and defendant company was not providing any services to the plaintiff company. On suggestion by the Ld. Counsel for plaintiff, DW admitted that there were no business dealings and operations between defendant no.1 company and the plaintiff company. Further on suggestion, DW1 admitted that payments were made by the defendant no.1 company for purchase of helicopters and auditors certified copy of statement has been filed on record which shows that helicopters were purchased by defendant no.1 company. DW1 was shown Ex.D2 which is Memorandum of Association of Old Suit No.CS (OS) 348/2009 New CS DJ 242/2020 Himachal Helicopter Skiing Pvt. Ltd. v. Himalayan Heli Services Pvt. Ltd. Page no. 40 of 47 defendant no.1/ Himalayan Heli Services Pvt. Ltd. can purchase its own helicopters. On seeing Ex.D2, DW1 answered in affirmative. He denied the suggestion that plaintiff company and Himalayan Heli Services Pvt. Ltd./ defendant no.1 were joint venture partners in conducting Heli Skiing in Manali and there is only direct customer and service provider relationship between defendant no.4 and the plaintiff company. He denied the suggestion that there was an understanding between plaintiff company and the defendant company regarding allotment of 49% equity shares in the defendant no.1 company as they do not reach to any understanding, discussion were of preliminary nature and random. He deposed that there was no direct commercial arrangement between plaintiff and defendant company.
h). Record shows that PW1 has relied upon document i.e. Minutes of Meeting dated 27.03.2003 Ex.PW1/12 (colly). This is neither an original document nor bears signature of any person who have attended the meeting dated 27.03.2003. Hence, plaintiff company failed to prove that defendant no.1 entered into joint venture agreement with the plaintiff by signing the Heads of Agreement dated 27.03.2003 and Minutes of Meeting as claimed in the plaint.
i). In view of the aforesaid discussion, it is clear that there is no written or oral understanding between plaintiff company and defendants regarding issuance, allotment or transfer of equity shares in the defendant no.1 company. No documents placed on record by the plaintiff company which shows that plaintiff company has invested any money in the defendant no.1 company Old Suit No.CS (OS) 348/2009 New CS DJ 242/2020 Himachal Helicopter Skiing Pvt. Ltd. v. Himalayan Heli Services Pvt. Ltd. Page no. 41 of 47 for purchase of helicopters and for rendering valuable consultancy services to the defendants including helicopter operations, fuel handling, marketing, ground operations, etc. Plaintiff company has also failed to lead evidence to show how the plaintiff company was induced and mislead by the defendants for purchasing and supplying the helicopters, valuable spare parts and consultancy to defendant no.1 company, apart from providing for on going repairs to the helicopters. Documents Ex.DW1/9 & Ex.PW1/D1 shows that four helicopters i.e. VT- EJS, VT-EDT, VT-WEX & VT-ERR currently endorsed on the permit of defendant no.1 company and have been purchased out of their internal accruals and none of the helicopters were purchased through contribution or investment from any foreign entity. Therefore, issue no.1, 2, 7 & 8 are decided against the plaintiff company and in favour of defendants. ISSUE No.3:
Burden to prove this issue was on the defendants. DW1/ Sh. Harsh Vardhan Sharma deposed in his evidence by way of affidavit Ex.DW1/A that application for grant of NOC to operate Non-schedule/ Air Taxi Service was made in the year 1999 and same is marked as Mark DW1/7. It had all details of funding, promoters, business plans, etc. He further deposed that this document does not show that plaintiff company or PW1 having any share or interest in the defendant no.1 company. In this application one of the sources of revenue of defendant no.1 company was shown by providing services to the plaintiff company. DW1 further deposed that a specific query was raised Old Suit No.CS (OS) 348/2009 New CS DJ 242/2020 Himachal Helicopter Skiing Pvt. Ltd. v. Himalayan Heli Services Pvt. Ltd. Page no. 42 of 47 by Ministry of Civil Aviation to the plaintiff company, whether plaintiff company had any interest in the defendant no.1 company and this letter was admitted by the plaintiff which is exhibited as Ex.D13. In response to this plaintiff company wrote a letter dated 19.05.1999 to Under Secretary, Government of India, Ministry of Civil Aviation that it has no interest in the defendant no.1 company.
Record shows that Mark DW1/7 was written by DW1 himself in the capacity of director of defendant no.1 and he has been examined by Ld. Counsel for plaintiff at length. Therefore, this documents has been duly proved by the defendants. Further, Ex.D13 is an admitted document. From this document it is clear that plaintiff company has no share/ interest in the defendant no.1 company. It is an admitted fact that there is no written document on record which shows that plaintiff company has any agreement/ contract for allotment of shares with defendant no.1. Further, PW1 in his cross-examination admitted that no Board Meeting/ General Meeting was held by defendant no.1 company wherein issue of allotment of shares to plaintiff was discussed and plaintiff company did not apply with any Government Department seeking permission to purchase shares in defendant no.1 company. This shows that no cause of action arose in favour of plaintiff company to file present suit against the defendants. Hence, this issue is decided in favour of defendants and against the plaintiff company.
ISSUES No. 4:
Old Suit No.CS (OS) 348/2009 New CS DJ 242/2020 Himachal Helicopter Skiing Pvt. Ltd. v. Himalayan Heli Services Pvt. Ltd. Page no. 43 of 47 Burden to prove this issue was on the defendants. Defendants have taken preliminary objection in their written statement that plaint of plaintiff is barred by law. It is stated in the written statement that defendant no.1 is an Civil Aviation Company and investment cannot be made in an Aviation Company without various prior approvals, security clearances, etc., which in case of foreign nationals are extremely stringent. Defendant no.1 company being in the Civil Aviation is governed by the Rules and Regulations framed by the Ministry of Civil Aviation and has to comply with all terms and conditions which are laid down by it. The Ministry of Civil Aviation, in exercise of its power has framed "Civil Aviation Requirements Section 3 Air Transport Series C Part-III". Clause IX of Civil Aviation Requirements Section 3 Air Transport Series C Part-III dated 31.03.2003 prohibits any change in the equity shareholding or in composition of Board of any Aviation Company without the prior approval and clearance from the Ministry of Civil Aviation.
Therefore, no such prior approval or permission has been sought or obtained and plaintiff's claim is not permissible being beyond the objects prescribed in its Memorandum of Association. DW1 relied upon document Ex.DW1/14 i.e. Civil Aviation Requirements Section 3 Air Transport Series C Part-III dated 31.03.2003 which provides that no Air Transport service shall be operated except with the special permission of Central Government and subject to such condition as it may think fit to impose. PW1 in his cross-examination admitted that there was restriction by Government of India on foreigners and foreign Old Suit No.CS (OS) 348/2009 New CS DJ 242/2020 Himachal Helicopter Skiing Pvt. Ltd. v. Himalayan Heli Services Pvt. Ltd. Page no. 44 of 47 entity to hold more than 40% shares in Aviation Company and there could not be any transfer of 49% equity shares to the plaintiff due to legal prohibitions and he admitted that no written agreement was executed between plaintiff and defendants regarding sale of 49% equity shares. Further, he also admitted during his cross-examination that he did not apply with any department of Government of India seeking permission to purchase shares in defendant no.1 company. Therefore, in view of the aforesaid discussion this issue is decided in favour of defendants and against the plaintiff company.
ISSUE No.5:
Burden to prove this issue was on the defendants. No evidence has been led by the defendants to prove that plaintiff company has approached this Court with unclean hands. Therefore, this issue is decided against the defendants and in favour of plaintiff.
ISSUE No.6:
a). Burden to prove this issue was on the defendants.
Defendants have taken preliminary objection in their written statement that suit of plaintiff is barred by limitation, delay and latches. It is stated that defendant no.1 company was formed in 1998 and plaintiff is now seeking allotment of shares in defendant no.1 company. Plaintiff never came forward to enter into contract to purchase shares upto the year 2004 and in the year 2005 it was made clear to the plaintiff that it was not Old Suit No.CS (OS) 348/2009 New CS DJ 242/2020 Himachal Helicopter Skiing Pvt. Ltd. v. Himalayan Heli Services Pvt. Ltd. Page no. 45 of 47 possible to work together in a joint venture with the plaintiff and plaintiff would not be entitled to any share holding in the defendant no.1 company. On the other hand, plaintiff company stated in its plaint that initial cause of action arose on 09 th and 16th of August, 2006 when plaintiff was constrained to write to the defendants to the fact of transfer/ allotment/ issuance of equity shares as the impediment perceived by the defendants to allot did not exist. PW1 in his cross-examination has admitted that discussions regarding alleged 49% equity shares occurred between the parties from the year 1999 till about 2004.
b). In the present case plaintiff has claimed the relief of permanent injunction, mandatory injunction and damages from the defendants. As per Article 113 of Limitation Act period of limitation for filing suit seeking relief of permanent and mandatory injunction is three year from the date when right to sue accrues. In the present case, plaintiff company has relied upon document i.e. letter dated 09.08.2006 and 16.08.2006 marked as Mark P1/20 (colly) as per these letters cause of action arose in the year 2006. These letters were written by one James Chirnside to Mr. Harsh Vardham and Mr. Wagnchuk Shamshu, Directors of World Expeditions Pvt. Ltd. (defendant no.4 herein), these letters are photocopies and author of these documents has not been examined by the plaintiff company to prove these documents. Defendant no.1 company has been incorporated in the year 1998, and as PW1 admitted that alleged 49% equity shares occurred between the parties from the year 1999 till about 2004. Plaintiff company filed the present suit in the year 2009 Old Suit No.CS (OS) 348/2009 New CS DJ 242/2020 Himachal Helicopter Skiing Pvt. Ltd. v. Himalayan Heli Services Pvt. Ltd. Page no. 46 of 47 after expiry of period of limitation of three years. Therefore, this issue is decided against the plaintiff and in favour of defendants. RELIEF:
In view of the fact that all issues except issue no.5 are decided against the plaintiff company, therefore present suit of the plaintiff company stands dismissed.
No order as to cost.
Decree sheet be prepared accordingly.
File be consigned to record room after due compliance.Digitally signed
Typed to the dictation directly, DR by DR HARDEEP corrected and pronounced in theHARDEEP KAUR Date:
open Court on 21.12.2022. KAUR 2022.12.22 14:46:49 +0530 (Dr. Hardeep Kaur) Additional District Judge-04, South District, Saket Courts, New Delhi.
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