Act of Bharti Airtel can't be attributed to Mittal, SC told

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SME Times News Bureau | 27 Nov, 2014
Bharti Airtel chairman Sunil Mital Wednesday told the Supreme Court that the alleged irregularities in the grant of the additional spectrum in 2002 against his company could not be attributed to him by holding that he was the company's alter ego and directing mind and will.

Assailing the March 19, 2013, order of the special Central Bureau of Investigation court, hearing the 2G case, by which it had summoned Mital to appear before it April 11, 2013, senior counsel Harish Salve told a bench of Chief Justice H. L.Dattu, Justice Madan B. Lokur and Justice A.K.Sikri that the acts of the company could not be attributed to its head.

He said that there was no vicarious liability of Mittal for the act of Bharti Airtel as he faulted the 2G special CBI court's order holding that he was the alter ego of the company and was directing mind and will of the company.

Salve told the court that the acts of a manager, director or any entity of a company in respect of that company could be attributed to the company and not the vice-versa.

The special CBI court had by its March 19, 2013, order had said: "I have carefully gone through the copy of the FIR, charge sheet, statement of witnesses and the documents on record. I am satisfied that there is enough incriminating material on record to proceed against the accused persons."

It further said, "I also find that at the relevant time, Sunil Bharti Mital was chairman-cum-managing director of Bharti Cellular Limited, Ashim Ghosh was the managing director of Hutchison Max Telecom (P) Ltd. and Ravi Ruia was director in Sterling Cellular Ltd., who used to chair the meetings of its board."

"In that capacity, they were/are, prima facie, in control of the affairs of the respective companies. As such they represents the directing minds and will of each company and their state of mind is the state of mind of the companies. They are/were 'alter ego' of their respective companies. In this fact of situation, the acts of the companies are to be attributed and imputed to them. Consequently, I find enough material on record to proceed against them."

Taking the court to the background of the allocation of the additional spectrum, Salve said that the investigating agency did not take account of statement by the then communications minister Arun Shourie - who had succeeded Pramod Mahajan in 2002 - that he had considered the matter and was satisfied and gave go ahead allotting additional spectrum.

"The court (apex court) will find a deafening silence because the next minister Arun Shourie says that I applied my mind and gave it (additional spectrum)," he said, adding that the act of companies being attributed to Mittal was bad in law.

Salve said that it is not the case of CBI that these people (Mittal, and others) were in conspiracy with the minister.

Hearing will continue Thursday.