Full

TEAM CODE:
BEFORE THE NATIONAL COMPANY LAW TRIBUNAL, PRINCIPAL BENCH, NEW DELHI
IN THE MATTERS OF:
C.P. NO. 666(PB)/2019
DAEDALUS CAPITAL
CRETE PARTNERS
HOMER …PETITIONERS
V.
PANTHEONWORKSPACE SOLUTIONS PRIVATE LIMITED
ICARUS
MINOTAUR CAPITAL
MINOS VENTURES
DEPARTMENT FOR PROMOTION OF INDUSTRY AND INTERNAL TRADE, MINISTRY

OF COMMERCE AND INDUSTRY (REPRESENTED THROUGH SECRETARY) …RESPONDENT
AND
CP 5678 (IB) / PB / 2019
PANTHEONWORKSPACE SOLUTIONS PRIVATE LIMITED … PETITIONERS
V.
TROY FINTECH SOLUTIONS PRIVATE LIMITED
ODYSSEUS (INTERIM RESOLUTION PROFESSIONAL)
RESERVE BANK OF INDIA … RESPONDENTS
WRITTEN SUBMISSIONS ON BEHALF OF THE PETITIONERS
MEMORIAL FOR PETITIONERS

8TH NLIU NATIONAL CORPORATE LAW MOOT, 2019
TABLE OF CONTENTS
TABLE OF CONTENTS ....................................................................................................................... II
LIST OF ABBREVIATIONS ................................................................................................................. IV
INDEX OF AUTHORITIES .................................................................................................................. VI
STATEMENT OF JURISDICTION .......................................................................................................... X
STATEMENT OF FACTS .................................................................................................................... XI
ISSUES RAISED ............................................................................................................................... XII
SUMMARY OF ARGUMENTS ........................................................................................................... XIII
ARGUMENTS ADVANCED ............................................................................................................... 14
ISSUE 1: WHETHER THE PRESENT MATTER IS MAINTAINABLE? ............................................... 14
1.1. THE APPLICATION FOR OPPRESSION AND MISMANAGEMENT IS MAINTAINABLE ...... 14
1.1.1. Petitioners have the Locus Standi ......................................................................... 14
1.1.2. Acts of Icarus are ‘Prejudicial to Public Interest’ ................................................ 15
1.2. THE INSOLVENCY PETITION IS MAINTAINABLE............................................................. 15
1.2.1. NCLT is the most appropriate forum .................................................................... 16
1.2.2. Infringement of Interest of the Petitioners ........................................................... 16
ISSUE 2: WHETHER THERE HAS BEEN MISMANAGEMENT AND OPPRESSION IN THIS CASE? ..... 17
2.1. INFLATED VALUATIONS IN THE DRHP ......................................................................... 17
2.2. TRADEMARK SOLD BY ICARUS IS QUESTIONABLE ....................................................... 18
ii
MEMORIAL ON BEHALF OF PETITIONERS

2.3. LOAN GIVEN TO TROY WITHOUT REQUIRED APPROVALS............................................. 19
2.4. REMOVAL OF ICARUS AS CHAIRMAN AND CEO ........................................................... 20
ISSUE 3: WHETHER THE CORPORATE INSOLVENCY PETITION AGAINST TROY MUST BE
ADMITTED BY THE NCLT? ........................................................................................................... 21
3.1. THERE IS NO OTHER ‘DISPUTE’ TO BAR THIS PETITION................................................ 21
3.2. TROY CANNOT BE EXCLUDED FROM BEING A ‘CORPORATE DEBTOR’......................... 22
PRAYER .......................................................................................................................................... 24
iii

LIST OF ABBREVIATIONS
& And
¶ Paragraph
AIR All India Report
Anr. Another
AP Andhra Pradesh
Art. Article
CA 2013 Companies Act, 2013
CBL Charu Biotechnology Ltd.
Co. Company
Com Company
DIN Director Identification Number
HC High Court
Hon’ble Honourable
IBBI Insolvency and Bankruptcy Board of India
IBC Insolvency and Bankruptcy Code, 2016
INR Indian Rupees
IPO Initial Public Offering
Ltd. Limited
Mah Maharashtra
NBFC Non-banking financial company
NCLAT National Companies Law Appellate Tribunal
iv

NCLT National Companies Law Tribunal
Ors. Others
Pvt. Private
RBI The Reserve Bank of India
SC Supreme Court
SCC Supreme Court Cases
SEBI Securities and Exchange Board of India
Troy Troy Fintech Solutions Pvt. Ltd.
u/s Under Section
UOI Union of India
v. Versus
Vol. Volume

INDEX OF AUTHORITIES
CASES REFERRED
S. No. Case Name Citation Page No.
Bernstein Litowitz Berger & Grossmann

1. 2014 SCC OnLine Del 4857 20
LLP v. UOI & Ors.
Cyrus Investment Pvt. Ltd. & Anr. v. Tata
2. 2017 SCC OnLine NCLAT 46 17
Sons Ltd. & Ors.
DF Deutsche Forfait AG and Ors v. Uttam C.P. No.
3. 13
Galva Steel Ltd. 45/I&BP/NCLT/MAH/2017
Enviro-Legal Action v. Union of India &

4. (2011) 8 SCC 161 15
Ors.
Fuerst Day Lawson Limited v. Jindal
5. (2011) 8 SCC 333 20
Exports Limited
Hemant D. Vakil v. RDI Print and (1995) 84 Com Cases 838 (CLB
6. 15
Publishing P. Ltd. – N. Delhi)
7. IDBI Bank Ltd. v. Official Liquidator 2019 SCC OnLine SC 1371 13
Company Appeal (AT)

8. Innoventive Industries v. IDBI Bank 18
(Insolvency) No. 1 & 2 of 2017
Jindal Saxena Financial Services Pvt. Ltd.
9. C.P. No. (IB)-84(PB)/2017 20
v. Mayfair Capital Pvt. Ltd.
10. K. Kishan v.Vijay Nirman Co. (2018) 17 SCC 662 18
M/s. India Awake for Transparency v. M/s.
11. Hasham Investment & Trading Company 2018 SCC OnLine NCLAT 583 12
Pvt. Ltd. & Ors.
Malbar Industrial Co. Ltd. v. Malbar

12. 1986 (59) Com. Cas. 969 14
Industrial Co. Ltd.
13. Mobilox v. Kirusa AIR 2017 SC 4532 18
vi

Mr. R. Prasanth v. UBC Engineers Private

14. 2017 SCC OnLine NCLT 968 17
Limited & Ors.
(1997) 90 Com Cases 79 (CLB -
15. Narain Das (K.) v. Bristol Grill (P.) Ltd. 16
New Delhi)
Piankin Kharwar v. Nagina Processors Pvt.
16. (2018) 208 Comp Cas 721 17
Ltd.& Ors.
17. Pramod Jain v. SEBI (2016) 10 SCC 243 16
Company Appeal (AT)

Randhiraj Thakur v. Jindal Saxena
18. (Insolvency) Nos. 32 & 50 of 20
Financial Services Pvt. Ltd. & Anr.
2018
Sahakari Khand Udyog Mandal Ltd v.
19. Commissioner of Central Excise & (2005) 3 SCC 738 15
Customs
Sangramsinh P. Gaekwad v. Shantadevi P.
20. (2005) 11 SCC 314 12
Gaekwad
Scottish Co-operative Whole Sale Society

21. (1958) 3 All ER 66 (HL) 17
Ltd. v. Meyer
Shanta Prasad Chakraborty v. Madarkhat
22. 2018 SCC OnLine NCLT 804 16
Tea Co. Pvt. Ltd.
23. SP Jain v. Kalinga Tubes Ltd AIR 1965 SC 1535 11, 12
24. State of Gujarat v. Essar Oil Ltd. (2012) 3 SCC 522 15
Transmission Corporation of AP v.
25. Civil Appeal No. 9597 of 2018 19
Equipment Conductors and Cables Ltd.
Uddar Gagan Properties v. Sant Singh &

26. (2016) 11 SCC 378 16
Ors.
STATUTES
 The Indian Contract Act, 1872
 The Companies Act, 2013

vii

 The Insolvency and Bankruptcy Code, 2016
 The National Company Law Tribunal Rules, 2016
 The Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements)
Regulations, 2018
BOOKS REFERRED
 A.K. Majumdar and Dr. G.K. Kapoor, “Company Law and Practice”, 18t ed., 2013, Taxmann
Publication
 Dr. S.C. Tripathi, “Modern Company Law”, 5th ed., 2012, Central Law Publications
 Gower and Devis, “Principle of Modern Company Law”, 9th Edition (2012) at page 1160
 N.K. Jain, Company Law, “Law and practice”, Deep and Deep Publications Pvt. Ltd., 2011
 Palmer’s Company Law, 25thed. (2010), Vol. 2 at page 11097
 Pollock & Mulla, “The Indian Contract Act”, Vol. 2, 14th ed., 2014
 R. R. Penningtonm “Company Law”, 6th ed., 1990
 Ramaiyya, “Guide to the Companies Act”, Vol. 2, 18th ed., 2015
LEGAL DATABASES REFERRED
 JStor
 Lexis Nexis Legal
 Manupatra Online Resources
 SCC Online
LEGAL DICTIONARIES
 Garner, Bryan A, Black‟s Law Dictionary, West (Thomson Reuters), United States of America
(9th Ed. 2009)
 Jonathan Law And Elizabeth Amartin, Oxford Dictionary Of Law, Oxford University Press,
London (7th ed. 2009)
 Justice V R Krishna Iyer, Dr. Justice A R Lakshmanan, Wharton‟s Concise Law Dictionary,
Universal Law Publishing Co., New Delhi (15th ed. 2009)
viii

 Justice Y V Chandrachud, R Ramanatha Aiyar Concise Law Dictionary, Lexis Nexis

Butterworths Wadhwa, Nagpur (3rd ed. 2011)
 M K Pithisaria, Mukesh Kumar Pithisaria, K J Aiyar Judicial Dictionary, Lexis Nexis
Butterworths Wadhwa, Nagpur (15th ed. 2011)
 Mick Woodley, Osborn‟s Concise Law Dictionary, Sweet And Maxwell, London (11th ed.
2009)
ix

STATEMENT OF JURISDICTION
The Petitioners have approached this Hon’ble Tribunal under Sec 241 of the CA 20131 (specifically,
under clause a) for oppression and mismanagement being caused to the Petitioners due to an array of
incidents caused by the majority investors. The Petitioners have also approached the Hon’ble NCLT
under Sec 7 of the IBC 20162 being a petition for insolvency.
The present memorandum sets forth the facts, contentions and arguments on behalf of the
Petitioners in the present matter.
1
Sec 241. Application to Tribunal for relief in cases of oppression, etc. – (1) Any member of a company who complains
that— (a) the affairs of the company have been or are being conducted in a manner prejudicial to public interest or in a
manner prejudicial or oppressive to him or any other member or members or in a manner prejudicial to the interests of the
company
2
Sec 7 – Initiation of corporate insolvency resolution process by financial creditor.
x

STATEMENT OF FACTS
The Petitioners humbly submit the following set of facts:

1. That, Mr. Icarus is a prominent name in building successful start-ups and had given India its first
unicorn. After 10 years of experience in this field, he founded the PantheonWorkspace which was a
new concept on co-working spaces, a business model based on long-term leases.
2. That, PantheonWorkspace through an IPO wanted to make the company public amidst rumours of
the company having its financial statements overvalued.
3. That, SEBI rejected the DRHP, the reasons for which were discussed in an Extraordinary General
Meeting (EGM).
4. That, the minority shareholders various unlawful instances done by the majority shareholders and Mr.
Icarus together, including overvaluation, including community-adjusted EBIDTA in the DRHP, related
party transactions, sale of PantheonWorkspace trademark at an exorbitant price of INR 25 crore that
unjustly benefitted him. The minority shareholders even asked for the removal of Icarus as the
Chairman and CEO.
5. That, Troy Fintech Solutions Pvt. Ltd. is another company founded by Mr. Icarus which was registered
as a non-banking financial company and that was facing financial hardships.
6. That, PantheonWorkspace lent INR 3500 crore to Troy without prior approvals. Lending of an amount
so huge impacted the financial status of both the companies.
7. That, Daedalus and Crete (minority investors) was objected by minority shareholders on account of
being a related party transaction which was undertaken without prior approvals.
8. That, Board of Directors’ Meeting was conducted to give this loan transaction to Troy a post-dated
approval.
9. That, Corporate Insolvency Proceedings were initiated against Troy at the Principal Bench,National
Law Company Tribunal, New Delhi by PantheonWorkspace after pressure from the minority investors.
This petition was opposed by the RBI.
10. That, action for oppression and mismanagement was brought against Icarus and majority investors,
Minotaur and Minor, by minority investors.
11. That, the respondents have resisted all the allegations and the matters are now listed before this Hon’ble
Tribunal to be heard on the basis of issues so framed in these written submissions.
xi

ISSUES RAISED
I. WHETHER THE PRESENT MATTER IS MAINTAINABLE?
II. WHETHER THERE HAS BEEN MISMANAGEMENT AND OPPRESSION IN THIS CASE?
III. WHETHER THE CORPORATE INSOLVENCY PETITION AGAINST TROY MUST BE ADMITTED
BY THE NCLT?
xii

SUMMARY OF ARGUMENTS
ISSUE 1: WHETHER THE PRESENT MATTER IS MAINTAINABLE?
The present matters have been filed at the NCLT’s Principal Bench in New Delhi as it is the most
efficacious remedy available to the aggrieved petitioners. The first case is regarding oppression and
mismanagement against the minority investors which has been filed at the NCLT under Sec 241 of the
CA 2013. On the other hand, the petitioner has approached the NCLT for insolvency proceedings of
Troy under Sec 7 of the IBC being a financial creditor.
ISSUE 2: WHETHER THERE HAS BEEN MISMANAGEMENT AND OPPRESSION IN THIS CASE?
The minority investors have approached this Hon’ble Tribunal to seek an action against the various
incidents of oppression and mismanagement. Petitioners have highlighted instances of Inflated
Valuations in the DRHP, Trademark Sold by Icarus is Questionable, Loan given to Troy without
required approvals to prove the claims. Moreover, due to these acts of Icarus and the majority investors,
there is an appeal for Removal of Icarus as Chairman and CEO. Moreover, his lifetime term of acting
as a director has also been challenged being in violation of the CA 2013.
ISSUE 3: WHETHER THE CORPORATE INSOLVENCY PETITION AGAINST TROY MUST BE ADMITTED
BY THE NCLT?
It is humbly submitted befre this Hon’blt Tribunal that the application for insolvency has been
challenged by the RBI by claiming two grounds. In contradiction to both these grounds, the Petitioners
claim that: firstly, the show-cause notice issued by the RBI does not qualify as a “dispute” because it
is not a suit or arbitration proceedings; secondly, Troy is an NBFC but its functions are not limited to
those provided for in the definition of “financial service” and thus it cannot be excluded from the scope
of “corporate debtor” and this matter will fall under the IBC.
xiii

ARGUMENTS ADVANCED
ISSUE 1: WHETHER THE PRESENT MATTER IS MAINTAINABLE?

1. It is humbly submitted before this Hon’ble Tribunal that there are two matters in the instant
case. The Petitioners submit that both the petitions involved in the instant case are well
within the provisions established by law, and hence fall within the jurisdiction of this
Hon’ble Tribunal. [1.1.] the petition for oppression and mismanagement has been filed
under Sec 241 of the CA 2013 and even [1.2.] the application of the insolvency petition,
filed under Sec 7 in front of the NCLT must sustain to carry on the proceedings.
1.1. THE APPLICATION FOR OPPRESSION AND MISMANAGEMENT IS MAINTAINABLE

2. The present petition for Oppression and Mismanagement is filed under Sec 241 of the CA
2013. It is humbly submitted before this Hon’ble Tribunal that the present petition is
maintainable because the petitioners in the instant case are aggrieved thus having the
requisite locus standi [1.1.1.] and also because the acts of Icarus can be pointed out as
prejudicial to public interest [1.1.2.].
1.1.1. Petitioners have the Locus Standi

3. It is humbly submitted before this Hon’ble Tribunal that the provision of Sec 241 can be
invoked if the affairs of the company have been or are being conducted in a manner
prejudicial to the interests of any members or the interests of the company.3 It is humbly
submitted before this Hon’ble Tribunal that the conditions required to be fulfilled to sustain
a petition for insolvency before the NCLT, the following conditions must be met:4
a) the majority should have committed continuing acts of oppression up to the date of
the petition
b) such conduct has to be in the exercise of their majority voting power in the
company’s affairs
c) the conduct of the majority shareholders has to be oppressive of the members in their
capacity qua shareholders
3
Sec. 241(1)(a), Companies Act, 2013
4
SP Jain v. Kalinga Tubes Ltd, AIR 1965 SC 1535
14

d) the members applying under Sec. 241 should be holding not less than one-tenth of
the issued share capital of the company
Since the required conditions are met in the present case, the petitioners have the requisite locus
standi to file the petition against the company.
1.1.2. Acts of Icarus are ‘Prejudicial to Public Interest’

4. It is also humbly submitted before this Hon’ble Tribunal that the Sec 241 of the CA 2013
gives provision for filing application against oppression and mismanagement. The present
matter falls within the scope of Sec 241(a) against the affairs of the company. In the instant
case, the interests of the minority shareholders has been hurt by the majority
shareholders.5The requirement of ‘prejudicial to public interest’ under Sec 241(a) of the
CA 2013 and since the application has been filed by a ‘member’ 6, this petition must be
allowed.
5. In the instant case, the matter has been filed as class action which finds place in the CA
2013 under Sec 245. Clause (1)(e) restricts any action taken which is against the provisions
established by law, and since the petitioners are contesting that the appointment of Icarus
as Chairman for lifetime is against the law laid, this petition must be admitted. Additionally,
Clause (1)(g)(ii) also talks about the use of improper or misleading audit statements and
during the listing of the company, PantheonWorkspace had presented inflated figured
thereby overestimating the financial value of the company, this petition must be admitted.
6. The Petitioners being minority shareholders seek relief from this Hon’ble Tribunal on
account of the misdeeds of the majority shareholders. They seek relief for the harm caused
to them and the total disregard for their interest in the company. We therefore come with
clean hands before this Hon’ble Tribunal and pray that this petition be allowed.7
1.2. THE INSOLVENCY PETITION IS MAINTAINABLE

7. It is humbly submitted before this Hon’ble Court that the insolvency petition initiated by
PantheonWorkspace against Troy is maintainable for recovery of the loan that was granted
to it by Mr. Icarus. This applicable has been filed under Sec 7 of the IBC read with Rule 10
and Part III of the NCLT Rules, 2016. The petition is maintainable because there is no other
5
SP Jain v. Kalinga Tubes Ltd. & Ors., AIR 1965 SC 1535
6
M/s. India Awake for Transparency v. M/s. Hasham Investment & Trading Company Pvt. Ltd. & Ors., 2018
SCC OnLine NCLAT 583
7
Sangramsinh P. Gaekwad v. Shantadevi P. Gaekwad, (2005) 11 SCC 314
15

‘dispute’ that can bar this petition [1.2.1.] as well as infringement of the interest of the
petitioners [1.2.2.]
1.2.1. NCLT is the most appropriate forum

8. It has been argued by RBI that the insolvency proceedings must not be allowed only
because it has already issued show-cause notice and that only after that is settled can
another “dispute” be raised. This is however not a legally valid because a “dispute” covers
within its meaning any existing legal suit or arbitration proceedings as per Sec 8(2) of the
IBC. In DF Deutsche Forfait AG and Ors v. Uttam Galva Steel Ltd.,8 the Mumbai Bench
has also clarified that a dispute would mean disputes raised in a court of law or Arbitral
Tribunal.
9. The purpose of the IBC is to address matters related to insolvency and bankruptcy. It has
also been reaffirmed by the IBBI9 that the main objective is to ensure that the insolvency
or bankruptcy resolution is being performed within the framework laid down by the law.10
Since the framework laid down in this matter is the IBC, this insolvency petition filed under
Sec 7 of the IBC must not be restrained.
1.2.2. Infringement of Interest of the Petitioners

10. It is humbly submitted before this Hon’ble Tribunal that there has been infringement of the
interests of the shareholders of the company. The unapproved loan given to Troy must not
have been given as both the companies were facing financial hardships. This loan did not
come from the sole money of Icarus, instead it was from PantheonWorkspace, however
without prior approval. There must have been a general meeting where consent should have
been taken before taking such a step, especially since the loan amount is as huge as INR
3500 crores which resulted in a functioning of both the companies.11 Let alone a general
meeting, even approval from the Board of Directors was taken before sanctioning this
loan.12 Therefore, the insolvency petition must be allowed by this Court in order to realise
the money of the loan which contains there interests of the aggrieved minority shareholders.
8
C.P. No. 45/I&BP/NCLT/MAH/2017
9
Vidhi Bankruptcy Research Programme, “Understanding the Insolvency and Bankruptcy Code, 2016: Analysing
Developments in Jurisprudence”, Insolvency and Bankruptcy Board of India (IBBI), available at:
https://www.ibbi.gov.in/webadmin/pdf/whatsnew/2019/Jun/190609_UnderstandingtheIBC_Final_2019-06-
09%2018:20:22.pdf (last accessed on 22nd October, 2019)
10
Bankruptcy Law Reform Committee, Report of the Bankruptcy Law Reform Committee, Vol 1 (2015), Para
4.2
11
¶13, Moot Proposition, 8th NLIU National Corporate Law Moot, 2019
12
IDBI Bank Ltd. v. Official Liquidator, 2019 SCC OnLine SC 1371
16

ISSUE 2: WHETHER THERE HAS BEEN MISMANAGEMENT AND OPPRESSION IN THIS CASE?
11. It is humbly submitted before this Hon’ble Tribunal that there has been oppression and
management in the instant matter. It is contented by the petitioners that there have been
various instances where the majority shareholders have disregarded the interests of
minority shareholders. Therefore, this invokes the provision of Sec 241(a) of the CA 2013
for correcting this wrong by filing of the present application before the NCLT. As there is
no other equally efficacious remedy available to the aggrieved minority shareholders,13 this
petition must be allowed.
2.1.INFLATED VALUATIONS IN THE DRHP

12. It is humbly submitted before this Hon’ble Tribunal that PantheonWorkspace had
submitted a DRHP with only overvalued statement about the company. It is not correct for
a company to inflate its value only so that it can list the company. It used the ‘community
adjusted EBITDA’ to inflate its value and inflating financial values to gain financial profits
is wrong14.
13. Additionally, PantheonWorkspace has registered itself as a “technology-based company”
although it is not a technology based company. It has also mentioned in the DHRP that it
is a technology-based company and taken benefits which are entitled to a technology-based
companies.15
14. It has registered itself as a start-up and taken benefits of exemptions available to a start-up.
It registered as a ‘start-up’ under the tag of being a technology company, but since it is not
a technology company, it cannot even register as a start-up or be entitled to the benefits
which the law confers upon such start-up due to PantheonWorkspace’s ineligibility.
15. In light of these activities, the petitioners also ask for an investigation on the matter of
inflation of value of the company’s statements in the DRHP as well as its registration as a
technology-based start-up company. We are of the view that the company not be listed until
all the conditions are lawfully met.
16. It is further submitted before this Hon’ble Tribunal that the SEBI (ICDR) Regulations, 2018
stipulates under Sch. VIII, Part A within Clause (1)(a) that only updated information must
be provided in a red herring prospectus and within Clause (1)(e) states that forward looking
statements must not be made. Failure in painting a true picture of the company’s financial
13
Malbar Industrial Co. Ltd. v. Malbar Industrial Co. Ltd., 1986 (59) Com. Cas. 969
14
Keynote Capitals Ltd., In re, (In matters of Pyramid Saimira Theatre Ltd.), WTM/KMA/IVD/280/07/2010
15
17

standing is a violation of SEBI (ICDR) Regulations, 2018 under Reg. 60 (4). To establish
this case, we would like to place on record that there is a definite ‘material effect’ on the
company’s image by making incorrect statements.16 The Petitioners contend that by
inclusion of the ‘community adjusted EBITDA’, the company has negated all its expenses
and overvalued its financial standing. Therefore, it has violated the law.
2.2.TRADEMARK SOLD BY ICARUS IS QUESTIONABLE

17. This is claimed by the Petitioners to be a case of ‘unjust enrichment’ by Icarus to the
company at the expense of the shareholders of the company.17 When a company’s Board
functions in a way that in favour of the majority shareholders and against the interest of the
minority shareholders, it will be deemed as mismanagement.18
18. The Hon’ble Apex Court has explained ‘unjust enrichment’ as “a benefit obtained from
another, not intended as a gift and not legally justifiable, for which the beneficiary must
make restitution or recompense.”19 In the instant case, Icarus had sold the trademark to the
company for INR 25 crore, which is an exorbitant price for that trademark. This payment
from the company naturally includes the interest of Icarus himself, but despite him having
the major portion of contribution, it does not discard the interest of the minority
shareholders. Since the capital of the company includes the interest of the minority
shareholders as well, this exorbitant amount causes a profit that has been incorrectly
obtained by Icarus. In justice, equity and good conscience, it belong to the minority
shareholders.20
19. As per the Indian Contract Act, 1872, restitution against unjust enrichment can only be
done under two conditions and both these conditions have been fulfilled by the sale of
trademark by Icarus at such a high price. These conditions, as also reaffirmed by the
Hon’ble Supreme Court, are as follows:21
a) when there has been unjust enrichment
b) when the profit has not been gained lawfully
16
In the matter of IPO of Onelife Capital Advisors Ltd., WTM/RKA/IVD/ID-10/35/2013
17
18
Hemant D. Vakil v. RDI Print and Publishing P. Ltd., (1995) 84 Com Cases 838 (CLB – N. Delhi)
19
Enviro-Legal Action v. Union of India & Ors., (2011) 8 SCC 161
20
Sahakari Khand Udyog Mandal Ltd v. Commissioner of Central Excise & Customs, (2005) 3 SCC 738
21
State of Gujarat v. Essar Oil Ltd., (2012) 3 SCC 522
18

Keeping in mind the view taken by the law on this matter, directions must be issued to ensure
that there is full disgorgement of gains of the wrongdoer.22
2.3.LOAN GIVEN TO TROY WITHOUT REQUIRED APPROVALS

20. In any case where a director has to lend a loan to any company, it must be the Board of
Directors of the company can sell, lease or otherwise dispose of the whole or substantially
whole of the undertaking of the company etc, only after adopting a special resolution by
the Board allowing such alienation.23 In the instant case, there was no consent taken from
the BoD before giving the loan to Troy. There has been a misuse of funds in the instant
case which results into oppression of shareholders.24
21. It is humbly submitted before this Hon’ble Tribunal that Troy is a company facing financial
losses and the facts have established that after the filing of the corporate insolvency petition
(for realisation of the debt owed to PantheonWorkspace), the value of the company has
reduced even more. Even the existing members on Troy have pulled out on trading,
escalated by external economic factors. This further establishes that Troy is not in a strong
place to have repaid the debt. Had there been an attempt to pass a resolution in this regard,
it has very less chances of passing. Therefore, malicious conduct on the part of Icarus can
be established and the main test of oppression is to see if there was any mala fide intention.25
22. Moreover, this transaction being one of a kind where there disclosure of materials facts was
not done,26 let alone taking approvals and thus, this transaction must be declared as a
violation of the law in place.
23. In a state where both Troy and PantheonWorkspace are facing financial hardships, giving
a loan to Troy in such a low interest rate is indirectly taking down PantheonWorkspace
with it. This is exaggerated by the fact that Troy has no signs of recovering to pay back to
PantheonWorkspace. Since Icarus is the common link between both these entities as he had
established them both, he acted in his personal interest to sanction the loan to Troy without
obtaining prior approvals. He did so to only to save his depleting company, Troy. However,
the law on this matter has laid down that ‘no director is allowed to misuse of power for
personal gains or ulterior motives.’27 This transaction indicates a lack of probity and fair
22
Uddar Gagan Properties v. Sant Singh & Ors., (2016) 11 SCC 378
23
Shanta Prasad Chakraborty v. Madarkhat Tea Co. Pvt. Ltd., 2018 SCC OnLine NCLT 804
24
NarainDas (K.) v. Bristol Grill (P.) Ltd., (1997) 90 Com Cases 79 (CLB - New Delhi)
25
VS Krishnan, 2008 (3) SCC 363, at ¶10
26
Pramod Jain v. SEBI, (2016) 10 SCC 243
27
Mr. R. Prasanth v. UBC Engineers Private Limited & Ors., 2017 SCC OnLine NCLT 968
19

dealing in the affairs of a company to the prejudice of some portion of its members and to
public interest,28 therefore, this act of Icarus must be declared unlawful.
2.4. REMOVAL OF ICARUS AS CHAIRMAN AND CEO

24. The minority shareholders have also asked for Icarus to be removed from his position as
the Chairman because according to the AoA, he has been nominated for this position in
conflict with the provisions of the CA 2013. The AoA has provisions that are in favour of
Icarus and is unjust towards the minority shareholders. It is a right of the shareholders to
bring a Director to power, and it is the right of the shareholders to remove a Director
through a resolution,29 even the AoA cannot take away this right of the shareholders.
Therefore, Icarus must not be given the privilege of being a director for lifetime.
25. In the light of all the events that have been cited and explained above, the minority
shareholders are of the view that there has been continuous oppression and mismanagement
through the various acts of Icarus. In such a situation where the case for oppression and
mismanagement has been clearly made out, the petitioners seek for the removal30 of Icarus
from the position of Chairman and CEO.
28
Scottish Co-operative Whole Sale Society Ltd. v. Meyer, (1958) 3 All ER 66 (HL)
29
Cyrus Investment Pvt. Ltd. & Anr. v. Tata Sons Ltd. & Ors., 2017 SCC OnLine NCLAT 46
30
Piankin Kharwar v. Nagina Processors Pvt. Ltd.& Ors., (2018) 208 Comp Cas 721
20

ISSUE 3: WHETHER THE CORPORATE INSOLVENCY PETITION AGAINST TROY MUST BE

ADMITTED BY THE NCLT?
26. It is humbly submitted before this Hon’ble Court that the present corporate insolvency
petition initiated PantheonWorkspace against Troy must be allowed. Icarus had allowed a
loan of INR 3500 crore which is crucial for PantheonWorkspace to improve its financial
status so that it can successfully pass its application for IPO.
27. The Hon’ble Supreme Court in Innoventive Industries v. IDBI Bank31 has explained that
when such an application for insolvency is filed with the NCLT by a financial creditor, it
must only have to deliberate is there is an existing debt or not. The NCLT does not have to
deliberate upon the features of the debt given. Since it is clear from the facts that a loan as
huge as that of INR 3500 crore has been given to Troy, there is an existence of a debt. This
qualifies the instant matter to be admitted by the NCLT.
3.1.THERE IS NO OTHER ‘DISPUTE’ TO BAR THIS PETITION

28. It is humbly submitted before this Hon;ble Tribunal that the RBI has contested the
insolvency petition on the grounds of an existing ‘dispute’. However, the RBI has referred
this dispute to the show-cause notice it had served to Troy. RBI claims that until
investigation is done and completed, this petition cannot be raised. The Petitioner hereby
submits that this matter does not fall within the scope of the word “dispute”.
29. In the case of Mobilox v. Kirusa,32 clarity on the definition of “dispute” has been given as
“The term “dispute” must be interpreted in a wide an inclusive manner to mean any
proceeding which had been initiated by the debtor before any competent court of law or
authority”. The present matter is based on insolvency and this adjudicating authority of the
Tribunal is the only prescribed forum under the IBC and cannot be discarded on the basis
of a show-cause notice issued by the RBI. Rather, it is helpful in getting appropriate
conclusions upon the concerns raised by the RBI in the said show-cause notice.
30. The Hon’ble Supreme Court in K. Kishan v.Vijay Nirman Co.,33 while rejecting an
insolvency petition in the NCLT has given the grounds for the same. It held that for
rejection of an insolvency petition due to another existing dispute, that dispute must be
existing in fact and not spurious, hypothetical or illusory. Only in in cases where there is a
dispute existing a fact, the adjudicating authority has to reject the insolvency petition.
31
Company Appeal (AT) (Insolvency) No. 1 & 2 of 2017
32
AIR 2017 SC 4532
33
(2018) 17 SCC 662
21

31. Moreover, the Hon’ble Apex Court has also clarified in Transmission Corporation of AP
v. Equipment Conductors and Cables Ltd.,34 that the NCLT must only have to examine if
there is an ongoing dispute, and not the merits of that dispute, to determine whether
insolvency petition must be admitted by the Tribunal or not. Moreover, it also clarified that
this ‘dispute’ is in terms of a civil suit or an arbitration proceedings. Since a show-cause
notice does not mean either a suit or arbitration proceedings, it cannot be a reason to
invalidate the insolvency proceedings.
3.2.TROY CANNOT BE EXCLUDED FROM BEING A ‘CORPORATE DEBTOR’

32. It is humbly submitted that the RBI claims that Troy is a “financial service provider” and
hence fall outside the jurisdiction of IBC, however, the Petitioners beg to differ from this
argument. This term is defined under Sec 3(16) of the IBC as: “financial service” includes
any of the following services, namely:—
(a) accepting of deposits;
(b) safeguarding and administering assets consisting of financial products, belonging to
another person, or agreeing to do so;
(c) effecting contracts of insurance;
(d) offering, managing or agreeing to manage assets consisting of financial products
belonging to another person;
(e) rendering or agreeing, for consideration, to render advice on or soliciting for the
purposes of—
i. buying, selling, or subscribing to, a financial product;
ii. availing a financial service; or
iii. exercising any right associated with a financial product or financial service;
(f) establishing or operating an investment scheme;
(g) maintaining or transferring records of ownership of a financial product;
(h) underwriting the issuance or subscription of a financial product; or
(i) selling, providing, or issuing stored value or payment instruments or providing
payment services;”
33. It is brought to the attention of this Hon’ble Tribunal that “non-financial banking company”
were excluded from the meaning of a “corporate debtor” under Sec 3(8) of the IBC because
it is a “financial service providers” as was held in Fuerst Day Lawson Limited v. Jindal
34
Civil Appeal No. 9597 of 2018
22

Exports Limited.35 However, in the same case it was also laid down not every NBFC can
fall within the definition of ‘financial service provider’. The way to determine this has
structured in the mentioned judgement as a functional test of financial service provider.
This test emphasizes on the fact that when an NBFC indulges in activities other than that
of a “financial service provider”, it can be included within the meaning of “corporate
debtor”.36
34. In the instant case, since Troy was also engaged in buying and selling of short-term bonds
named ‘Trojan Horse’,37 it is established fact that Troy has indulged itself in conducting
activities which are beyond the functions of a ‘financial service provider’. Since Troy
qualifies as an NBFC which has functions that fall beyond the list of functions that a
‘financial service provider’ can offer, as explained in the definition of “financial service”
under Sec 3(16), this petition cannot be barred on the claim that NBFC is a “financial
service provider”.38 Moreover, since the RBI has arrived on a conclusion based on a wrong
premise,39 their reasoning must be done away with.
35
(2011) 8 SCC 333
36
Randhiraj Thakur v. Jindal Saxena Financial Services Pvt. Ltd. & Anr., Company Appeal (AT) (Insolvency)
Nos. 32 & 50 of 2018
37
38
Jindal Saxena Financial Services Pvt. Ltd. v. Mayfair Capital Pvt. Ltd., C.P. No. (IB)-84(PB)/2017
39
Bernstein Litowitz Berger & Grossmann LLP v. UOI & Ors., 2014 SCC OnLine Del 4857
23

PRAYER
In the light of the issues raised, arguments advanced and authorities cited, may this Hon’ble
Court be pleased to:
1. Allow the present petitions before the Hon’ble Tribunal;

2. Declare that there has been oppression and mismanagement against the minority
shareholders and direct the petitioners for full disgorgement of gains of the wrongdoer;
3. Direct for the removal of Icarus from the position of Chairman and CEO of
PantheonWorkspace;
4. Allow the petition for insolvency for recovery of loan given by PantheonWorkspace to
Troy;
AND/OR
Pass any other relief, that this Hon’ble Supreme Court may deem fit and proper in the
interest of justice, equity and good conscience.
For this act of kindness, the Claimant shall duty bound forever pray.
Sd/-
(Counsels for the Claimant)
24

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TEAM CODE:

IN THE MATTERS OF:

C.P. NO. 666(PB)/2019

PANTHEONWORKSPACE SOLUTIONS PRIVATE LIMITED

DEPARTMENT FOR PROMOTION OF INDUSTRY AND INTERNAL TRADE, MINISTRY

CP 5678 (IB) / PB / 2019

PANTHEONWORKSPACE SOLUTIONS PRIVATE LIMITED … PETITIONERS

TROY FINTECH SOLUTIONS PRIVATE LIMITED

ODYSSEUS (INTERIM RESOLUTION PROFESSIONAL)

RESERVE BANK OF INDIA … RESPONDENTS

WRITTEN SUBMISSIONS ON BEHALF OF THE PETITIONERS

MEMORIAL FOR PETITIONERS

TABLE OF CONTENTS ....................................................................................................................... II

LIST OF ABBREVIATIONS ................................................................................................................. IV

INDEX OF AUTHORITIES .................................................................................................................. VI

STATEMENT OF JURISDICTION .......................................................................................................... X

STATEMENT OF FACTS .................................................................................................................... XI

ISSUES RAISED ............................................................................................................................... XII

SUMMARY OF ARGUMENTS ........................................................................................................... XIII

ARGUMENTS ADVANCED ............................................................................................................... 14

ISSUE 1: WHETHER THE PRESENT MATTER IS MAINTAINABLE? ............................................... 14

1.1. THE APPLICATION FOR OPPRESSION AND MISMANAGEMENT IS MAINTAINABLE ...... 14

1.1.1. Petitioners have the Locus Standi ......................................................................... 14

1.1.2. Acts of Icarus are ‘Prejudicial to Public Interest’ ................................................ 15

1.2. THE INSOLVENCY PETITION IS MAINTAINABLE............................................................. 15

1.2.1. NCLT is the most appropriate forum .................................................................... 16

1.2.2. Infringement of Interest of the Petitioners ........................................................... 16

2.1. INFLATED VALUATIONS IN THE DRHP ......................................................................... 17

2.2. TRADEMARK SOLD BY ICARUS IS QUESTIONABLE ....................................................... 18

MEMORIAL ON BEHALF OF PETITIONERS

2.3. LOAN GIVEN TO TROY WITHOUT REQUIRED APPROVALS............................................. 19

2.4. REMOVAL OF ICARUS AS CHAIRMAN AND CEO ........................................................... 20

ISSUE 3: WHETHER THE CORPORATE INSOLVENCY PETITION AGAINST TROY MUST BE

ADMITTED BY THE NCLT? ........................................................................................................... 21

3.1. THERE IS NO OTHER ‘DISPUTE’ TO BAR THIS PETITION................................................ 21

3.2. TROY CANNOT BE EXCLUDED FROM BEING A ‘CORPORATE DEBTOR’......................... 22

MEMORIAL ON BEHALF OF PETITIONERS

AIR All India Report

CA 2013 Companies Act, 2013

CBL Charu Biotechnology Ltd.

DIN Director Identification Number

IBBI Insolvency and Bankruptcy Board of India

IBC Insolvency and Bankruptcy Code, 2016

INR Indian Rupees

IPO Initial Public Offering

NBFC Non-banking financial company

NCLAT National Companies Law Appellate Tribunal

MEMORIAL ON BEHALF OF PETITIONERS

NCLT National Companies Law Tribunal

RBI The Reserve Bank of India

SCC Supreme Court Cases

SEBI Securities and Exchange Board of India

Troy Troy Fintech Solutions Pvt. Ltd.

u/s Under Section

UOI Union of India

MEMORIAL ON BEHALF OF PETITIONERS

S. No. Case Name Citation Page No.

Bernstein Litowitz Berger & Grossmann

Enviro-Legal Action v. Union of India &

7. IDBI Bank Ltd. v. Official Liquidator 2019 SCC OnLine SC 1371 13

Company Appeal (AT)

10. K. Kishan v.Vijay Nirman Co. (2018) 17 SCC 662 18

M/s. India Awake for Transparency v. M/s.

Malbar Industrial Co. Ltd. v. Malbar