M/S Indocopters Pvt. Ltd. And Anr. vs Directorate General Of Civil ...
2012 Latest Caselaw 6277 Del

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*      IN THE HIGH COURT OF DELHI AT NEW DELHI

                                             Judgment delivered on: 18.10.2012

+                   W.P.(C) 5784/2012


M/S INDOCOPTERS PVT. LTD AND ANR                         ..... Petitioners


                    versus


DIRECTORATE GENERAL OF CIVIL AVIATION
AND ANR                             ..... Respondents

Advocates appeared in this case:

For the Petitioners: Mr N.K. Kaul, and Mr Parag Tripathi, Sr. Advs. with Ms Rameeza Hakeem, Mr Ravi Prakash & Mr Suyash Mohan Guru, Advs. For the Respondents: Mr Rajeev Mehra, ASG with Ms Anjana Gosain & Mr Aditya, Advs.

CORAM:

HON'BLE MR. JUSTICE RAJIV SHAKDHER

RAJIV SHAKDHER, J (ORAL) CM No. 11867/2012

1. The writ petitioner has approached this court to challenge, a communication dated 04.09.2012, whereby its application, requesting for renewal of the Non-Scheduled Operator Permit (NSOP) No. 06/2006 beyond 24.08.2012; has been declined.

1.1 It is not in dispute that the petitioner no. 1 company had filed an application for renewal of NSOP on 17.07.2012, followed by yet another application on 24.08.2012. Clearly these applications were filed, or at least

the first application, was filed prior to the date on which the validity of the NSOP, would come to an end, in the usual course, by efflux of time. 1.2 This action; rather, as alleged, deliberate inaction of the respondents, has been assailed.

2. The petitioner has come to court in the background of the following broad facts:

2.1 Petitioner no. 1 company claims to be engaged in the business of maintaining, repair and provision of overhauling services to helicopters. Its niche clientle, apparently include institutions which are part of the State apparatus or were at least, till very recently. It also claims to be, a commercial partner and authorized maintenance centre for a company by the name of Eurocopter, which is, apparently, one of the leading helicopter manufacturers, in the world. Petitioner no. 1 company claims to be in business since, 2005-06.

2.2 Given its background, petitioner no. 1 company had, therefore, applied for a NSOP, to which I have made a reference above. Admittedly, respondent no. 1, i.e., the Director General of Civil Aviation (in short DGCA), had granted petitioner no. 1 company, the NSOP, under the relevant rule, i.e., Rule 134A of the Aircraft Rules, 1937 (in short Aircraft Rules).

2.3 At the relevant time in 2005-06, its Board of Directors comprised of the following persons, i.e., Lt. Gen SJS Saigal and Mr Anil Mansharamani, who is in the present proceedings arrayed as petitioner no. 2. 2.4 These gentlemen were granted security clearance by the respondents, which includes the Union of India (Ministry of Home Affairs). It appears that Mr Ravinder Kumar Rishi (referred to as Mr Ravi Rishi), who is the main protagonist, was inducted as a director in petitioner no. 1 company, on

29.01.2009.

2.5 It is not in dispute that the grant of NSOP is covered by the provisions of what is, ubiquitously, known as, the Civil Aviation Requirement (in short CAR). The CAR, in vogue, presently, is one dated 01.06.2010. 2.6 It appears that, in an around 01.05.2012, the petitioner no. 1 company approached respondent no. 2 for inducting three persons on their Board of Directors, namely, Mr Sanjeev Kumar Choudhary, Mr Akhilesh Kulshresthra and Mr Rajesh Chopra. It is the case of the petitioner that they have received no response qua their request, nor was security clearance granted vis-à-vis the names suggested.

2.7 On 07.05.2012 petitioner no. 1 company claims that it received information from respondent no. 2, intimating it that security clearance of Mr Ravi Rishi, had been withdrawn. The contents of the said communication to the extent they are relevant are extracted hereinafter:

".....Now, therefore, in view of the denial of security clearance to Sh. Ravi Rishi by Ministry of Home Affairs, M/s Indocopter Pvt. Ltd. is hereby directed to remove Sh. Ravi Rishi from the Board of Directors of their company with immediate effect and intimate this office about the compliance of the Companies Act 1956, Chapter II Section 252(2), as quoted below:

U/s 252(1) Every public company shall have at least three directors;

U/s 252 (2) Every other Company (Private Company) shall have at least two directors.

The action taken in the matter is required to be submitted within 07 days of issue of this letter. This issue with the approval of Director General...."

2.8 A perusal of the said letter would show that respondent no. 2, was of the view that while Mr Ravi Rishi had to be dropped from the Board of Directors because of denial of security clearance, it would still not be compliant with the extant laws as its Board of Directors would require to

have a minimum of two directors; failing which the validity of the NSOP would be in jeopardy.

2.9 In compliance with the directive dated 07.05.2012 of respondent no. 2, on 09.05.2012, Mr Ravi Rishi resigned from the Board of Directors of the petitioner no. 1 company; albeit with effect from 07.05.2012. This communication was addressed by petitioner no. 1 company to respondent no. 2. The communication made it clear that Form 32 could not be filed with the Registrar of Companies as the number of directors would fall below the minimum stipulated under the Companies Act, 1956 (in short the Companies Act). The sub test of the letter appears to be that since petitioner no. 1 company had received security clearance qua another director (papers in respect of whom had been filed earlier) Form 32, would be filed in the near future on receipt of necessary approval.

3. The petitioners submit that on 09.07.2012, they had suggested the name of yet another person, i.e., Mr Nitin Sachdev, for induction as a director. A reminder to that effect was also sent to the respondents, on 12.07.2012.

3.1 The petitioner‟s anxiety with regard to the non-receipt of a response from the respondents attained criticality, in view of the fact that, the validity period of the NSOP was coming to an end, on 24.08.2012. 3.2 It is in this background, as indicated above, that the petitioner no. 1 company filed an application on 17.07.2012, with the respondents, seeking renewal of its license. As indicated above, a second application was preferred on 24.08.2012.

3.3 This apart, a reminder was sent on 06.08.2012, articulating the necessity for security clearance and, reminding the respondents qua their earlier letters dated 01.05.2012 and 09.07.2012.

3.4 On 06.08.2012, respondent no. 1 evidently wrote to petitioner no. 1 company pointing out deficiencies with regard to the application for renewal of NSOP. The deficiencies pointed were as follows:

"....(1) Status of Security Clearance in r/o Board of Director;

(2) Copy of current valid Certificate of Airworthiness in r/o VT-VAD; and (3) Monthly/ Annual Operation/ Financial Returns in the prescribed Performa as given in Annexure to CAR Section 3 Series „C‟ Part III, for the month of April, May, July, November for 2011 and February 2012 and Annual Statistical/Financial returns for the year 2010-11 and 2011-

12....."

3.5 In response to the aforesaid petitioner no. 1 company wrote to the respondents vide letter dated 08.08.2012, wherein apart from other aspects qua which the respondents had raised an issue in their letter dated 06.08.2012, the petitioners addressed the issue of security clearance by intimating that one of their directors, i.e., petitioner no. 2, was also security cleared. As regards others, it was intimated that they had sought security clearance vide letters, which dated back to 27.02.2012. 3.6 I have already indicated, in the earlier part of this order the names of the persons qua whom security clearance was sought by the petitioners from time to time. As far as the persons, whose names were proposed in this communication, as directors, subject to security clearance being granted by the respondents, were as follows:

(a) Mr Sanjay Sayal letter submitted on 27th Feb 2012

(b) Mr Sanjeev Kumar Choudhary letter submitted on 2nd May 2012

(c) Mr Akhilesh Kulshrestha letter submitted on 2nd May 2012

(d) Mr Rajesh Chopra letter submitted on 2nd May 2012

(e) Mr Nitin Sachdev letter submitted on 24th May 2012

3.7 It is in this background that the respondents while, not taking a decision on the names proposed by the petitioner no. 1 company passed the impugned order dated 04.09.2012.

4. The petitioner being aggrieved has approached this court by way of the present writ petition.

5. Notice in the writ petition was issued by me on 14.09.2012. The notice was made returnable on 24.09.202. At the hearing held on 24.09.2012, respondents were directed to bring to court the necessary records which would show the material that they had available with them, with regard to the issue of security clearance of Mr Ravi Rishi. A direction was also issued to the petitioners to indicate the shareholding of the petitioner no. 1 company and any change which may have taken place vis-à- vis shareholding post, the date of its incorporation. The matter was listed for further proceedings today. i.e., 18.10.2012.

6. Mr Mehra, the learned ASG, has briefly made the following submissions.

(i) Mr Ravi Rishi holds a majority stake in petitioner no. 1 company, and that, security clearance vis-à-vis him has been denied by the Ministry of Home Affairs.

(ii) In so far as remaining shareholders are concerned, these are entities and persons, who are under the control of Mr Ravi Rishi.

(iii) The present case, is not a case of cancellation or suspension of a NSOP but, a case of non-renewal and hence the provisions of Rule 134A(5) of the Aircraft Rules are not applicable which, otherwise admittedly mandate issuance of show cause notice. 6.1 Apart from this, Mr Mehra has also shown me photocopies of documents which according to the respondent was the relevant material

suggestive of the fact that, there were issues qua Mr Ravi Rishi raised by intelligence agencies.

6.2 Mr Mehra says that the photocopies are backed by original records, which are available in court.

6.3 In sum and substance, it is Mr Mehra‟s contention that, the impugned action is based on the inputs of the Ministry of Home Affairs, which in turn has relied upon the inputs of intelligence agencies. Mr Mehra says; the material on record does not allow the respondents to renew presently, the license of petitioner no. 1 company.

7. Mr Kaul, who appears for the petitioner, on the contrary made the following submissions:

7.1 It is not as if respondents have been unaware of the fact that, Mr.Ravi Rishi is a majority shareholder of petitioner no. 1 company. For this purpose he has drawn my attention to the judgment of a Single Judge of this court, (passed by Mr Justice Vipin Sanghi), in WP(C) No. 2775/2012, titled Global Vectra Helicorp vs Directorate General of Civil Aviation & Anr. and WP(C) 3197/2012 titled Mr. Rohit Hans & Anr. vs Directorate General of Civil Aviation & Anr. dated 11.06.2012; wherein observations to that effect are made.

7.2 Mr Kaul has also pointed out, referring to the observations of the learned Judge in paragraphs 69 to 72, 78 & 79, to demonstrate broadly that the intelligence inputs now trotted out by the respondents, were in fact put before the learned Single Judge, who after examining the same came to a prima facie conclusion that it did not indicate that there was grave urgency, justifying exclusion of opportunity of granting oral hearing to the petitioners, in that case, as is mandated under Rule 134A(5) of the Aircraft Rules.

7.3 It is thus the contention of the learned Senior Counsel that having regard to the fact; which is that, not only is the material (i.e., the purported intelligence inputs) been on record, but also information vis-à-vis Mr Ravi Rishi, having been in control of the affairs of the petitioner no. 1 company in the knowledge of the respondents - the least that the respondents could have done was to serve upon them a show cause notice, so that, they could present their case before the respondents. Mr Kaul, has argued that non- renewal of license is no less punitive than an order of cancellation or suspension. It is his contention that even in a case of non-renewal of license, the minimum that could have been done by the respondents was to issue a show cause notice to petitioner no. 1 company and granted it an oral hearing in accordance with the prescribed rules. For this purpose, learned senior counsel has relied upon the judgment of this Supreme Court in the case of Raj Restaurant and Anr. vs Municipal Corporation of Delhi 1982 (3) SCC 338.

8. I have heard the learned counsels for the parties. I am of the view that the entire dispute in this matter is pivoted on the action that has been taken by the respondents qua Mr Ravi Rishi. This fact is not denied by the learned ASG. Mr Ravi Rishi has been denied security clearance, which is the reason, articulated before me, for not renewing the NSOP granted to petitioner no. 1 company. It is not in dispute that judgment of the learned Single Judge in Global Vectra (supra) is pending in appeal. The said appeal is registered as: LPA no. 645/2012. It is also not in dispute that, the appeal has been filed after a delay of nearly 88 days. The respondents have, as a matter of fact, filed an application for condonation of delay in the said appeal, in which, admittedly notice has been issued only qua the application for condonation of delay. The said application alongwith the appeal is

coming up for hearing before the Division Bench, on 02.11.2012.

9. Mr Mehra, attempted to argue before me that there is material available on record, which was collected post judgment, which propelled the respondents in passing the impugned order. Specific reference in this regard was made by Mr Mehra to the money laundering case registered against Mr Ravi Rishi. I have looked at the record. The record seems to indicate that the Enforcement Directorate has registered a case of money laundering against Mr. Ravi Rishi for alleged irregularities in the Tatra transaction, on the basis of a FIR filed by CBI. This information is already in public domain.

10. Mr Mehra has also argued, based on the internal guidelines of the Ministry of Home Affairs that, induction of other persons on the Board of Directors was not a possibility, in view of the fact that, petitioner no. 1 company was controlled by Mr Ravi Rishi. I find that these internal guidelines of Ministry of Home Affairs are dated 12.03.2004, and if this situation obtained, action ought to have been taken much earlier on these lines.

11. I have perused the orders of the Single Judge in Global Vectra (supra). It is quite clear that the record of the Ministry of Home Affairs and the Intelligence Bureau was examined by the learned Single Judge. Prima facie, he did not find any such material which required emergent action by the respondents in derogation of the provisions of the Aircrafts Rules, in particular Rule 134A(5) whereby, admittedly, the respondents, in the very least, were required to issue a show cause notice to petitioners in that case. The position, according to me, is no different in the present case. Non- renewal of the NSOP, post withdrawal of security clearance of Mr Ravi Rishi, in the very least, required issuance of a show cause notice by the

respondents, so that the petitioners could have had an opportunity to represent their case; and if they so desired an oral hearing.

12. In any event, as is noticed on a perusal of the judgment of the learned Single Judge, the impugned action appears to be a reaction to the observations made therein, to the effect that while, security clearance was withdrawn from Global Vectra Helicorp and Mr Ravi Rishi, the NSOP qua petitioner no. 1 company, at the relevant time, continued to subsist. The impugned action has been taken perhaps, by the respondents, to appear to be consistent in their approach qua the companies, which are under the control of Mr Ravi Rishi. Ordinarily, no fault could have been found with the approach except that, the reason given did not call for exclusion of the rights conferred on petitioner no. 1 company under Rule 134A(5) of the Aircraft Rules.

13. Having regard to the totality of the facts and circumstances obtaining in the case, I am of the view that pending the decision in the appeal, i.e., LPA No. 645/2012, the impugned order dated 04.09.2012 ought to be stayed. It is ordered accordingly. The application is thus, disposed of. WP(C) 5784/2012 List on 24.01.2013.

RAJIV SHAKDHER, J OCTOBER 18, 2012 kk