Respondent number 1 was the founder promoter of a companyporation known as Iridium LLC incorporated in the State of Delaware, U.S.A Iridium LLC was incorporated on 19th July, 1996 as a wholly owned subsidiary of respondent number 1.
Respondent number1 also designed, developed, sold, maintained and operated the hardware and software of the Iridium System Project.
It was further alleged in the companyplaint that respondent number1 initially held the entire equity in Iridium.
These five segments were supplied, sold, maintained and operated by three companytracts viz.
It was further alleged that most of the persons on the board of Iridium were either former employees or current employees of respondent number1 who were deputed or seconded to Iridium.
The appellant had the backing of some of the prominent financial institutions of the companyntry with the best of expertise in assessing the arrears of risk capital as well as with admitted technical advice, support and expertise of Videsh Sanchar Nigam Limited VSNL .
Ltd. was seeking to settle by adopting a cheaper companyrcive method.
Iridium System Iridium Project which expressions are used inter changeably was represented as being the worlds first companymercial system designed to provide global digital hand held telephone data, facsimile, paging, geo location services similar to todays cellular phone.
These matters were to be examined by Court of companypetent jurisdiction at the appropriate time.
Perused documents.
The entire material was placed before the Judicial Magistrate.
The close association of respondent number 1 with the Iridium project was fully disclosed to all the potential investors in the 1992 PPM prior to their investment.
It was emphasized that Iridium Inc. was an instrumentality of respondent number 1 the companyporate veil from behind which respondent number 1 operated.
The Collusy Group is number operating the System on a limited scale through one single gateway, which further establishes the fact that there was numberneed for more than one gateway.
Consequently, the investment of the appellants and its companystituent shareholders of approximately Rs.500 crores was wiped out and or companypletely lost.
The necessity for installation of a gateway was a companyplete fraud.
Substantially, all the initial capital raised by Iridium form persons which included Iridium India Telecom Ltd was used to make payments to respondent number1.
The appellants subsequently learnt that within nine months of the huge investment made in Iridium, it applied for bankruptcy protection under Chapter 11 of the U.S. Bankruptcy Code.
Respondent number1 companyceived, orchestrated, directed and companytrolled Iridium and was at all material times Iridiums dominant shareholder, supplier, financier, companytroller of its board, as well as the developer of Iridiums business model and the creator of the Iridium system, which was respondent number1s proprietary space based Satellite Communication system.
The representations were made to very select strategic investors, who were experts in their own fields.
From the inception respondent number1 exercised effective companytrol over the Board of Directors of Iridium.
It was further alleged that respondent number1 was the primary companytractor for Iridium system project.
This represented 0.4 of the amount which was paid for by the appellant and other investors.
Which of the views is ultimately to be accepted, companyld only be decided when the parties have had the opportunities to place the entire materials before the Court.
As already stated above, this companyprised of five segments.
126 crores for the gateway.
The said companytracts were intentionally structured to ensure that although Iridium paid all the development companyts, respondent number1 would still own the most valuable assets of the Iridium system.
The appellants, therefore, addressed a numberice dated 12th April, 2001, respondent No.1 calling upon them to make payment of a sum of US 250 million, being the loss suffered by the appellant as also seeking punitive damages.
Copies of PPM were distributed to and received by several prominent Indian companypanies, both in the public and private sector.
Each of these companytracts was awarded by Iridium Inc. to respondent number1.
It was further mentioned in the Complaint that in August 1992, a PPM was floated through merchant bankers, Goldman Sachs who acted as placement agents with the intention of attracting investments from large and successful companypanies world wide.
On the basis of the aforesaid allegations, the appellants have filed a companyplaint before the Judicial Magistrate, Ist Class, Khadki Court, Pune charging that respondent No.1 are guilty of the offence of criminal companyspiracy for cheating the appellant and for the offence of cheating companymitted pursuant to the companyspiracy.
It reveals that companyplainant is a companypany of which the shares are held by public financial institutions, nationalized banks and public insurance companypanies i.e. IDDI, ICICI, SBI, UTI, GIC, LIC etc.
i the space system companytract ii the operation and maintenance companytract and the terrestrial Network Development Contract.
The High Court, according to Mr. Desai, companyrectly relied on the risk factors.
Left with numberother alternative, the appellants filed a criminal companyplaint alleging that respondent number1 has companymitted an offence of cheating as defined under Section 415 of the Indian Penal Code.
The High Court granted ad interim relief staying the proceeding of C.C. No.
This according to him would amount to playing a fraud on companyrt.
The appellant had then filed a Special Leave Petition Crl.
Heard the advocate Nimbalkar for the companyplainant.
They were deliberately withheld to mislead the Magistrate into issuing process.
The High Court was also justified in relying on the documents as the appellants had relied on the reply to the numberice before the Magistrate.
The research group characterized the product as suitable only for oil rigs or the desert.
Aggrieved by the said judgment, the appellant have filed the present appeal before this Court.
Iridium LLC was the successor of another companyporation known as Iridium Inc. which was incorporated on 14th July, 1991 also a wholly owned subsidiary of respondent number1.
Although the equity of respondent number1 was subsequently diluted by sale to various investors and shareholders through a series of private public offerings, respondent number1 companytinued to hold, own and companytrol a substantial part about 19.6 of the equity of Iridium.
It was also alleged that respondent number1 provided itself with excessive profits while saddling Iridium with exorbitant companyts.
It was further averred that Iridium System was companyceived by respondent number 1 in the year 1987 and it was intended to be a wireless companymunication system through a companystellation of 66 satellites in low orbit to provide digital service to mobile phones and other subscriber equipment globally.
The High Court was unnecessarily influenced by the submission that the Risk Factors had been duly pointed out to the prospective investors including the appellants.
The respondent No.1 by its reply dated 2nd June, 2001 repudiated his liability and instead made a claim of US 6,977,989 upon the appellant.
Despite best efforts, Iridium companyld number be revived and ultimately the much touted Iridium System, for which US 6.5 billion had been paid to respondent No.1, was sold for a paltry sum of US 25 million.
On or about, 19th July, 1996 Iridium Inc was merged into Iridium LLC.
Motorola Inc respondent number 1 , Iridium LLC and Iridium Inc. are a part of one group of companyporations created through mergers and takeovers.
SURINDER SINGH NIJJAR, J. The original companyplainant Iridium India Telecom Ltd. hereinafter referred to as the appellant has preferred this appeal against the judgment and order dated 8th August, 2003, passed by a learned single judge of the Bombay High Court quashing the criminal companyplaint dated 3rd October, 2001 filed by the appellant, inter alia, against respondent number1, namely, Motorola Incorporated.
The allegations companyld be proved or disproved on the basis of the evidence led by the parties.
These were documents which were required to be placed before the Magistrate by the appellants.
The order reads as under Read Complaint and verification.
Prominent amongst these were a Infrastructure Leasing and Financial Services Ltd. ILFS b Industrial Development Bank of India IDBI c Industrial Credit and Investments Corporation of India ICICI d State Bank of India SBI e Export Import Bank of India EXIMP Bank f Housing Development Finance Corporation Ltd. HDFC g Unit Trust of India UTI h General Insurance Corporation of India GIC i Life Insurance Corporation of India LIC The object of the said PPM was to obtain funds investments to finance the Iridium project.
