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WE THE PEOPLE………………………………………………………. (PETITIONERS)

COAON ; ORS………………………………………………………… (RESPONDENTS)
Table of ContentsList of AbbreviationsAIR ALL INDIA REPORTER
Index of AuthoritiesStatement of JurisdictionThe Petitioner has approached the Hon’ble Supreme Court u/art. 32 of the Constitution of Natta, which is in pari materia with the laws in Constitution of India.Statement of FactsWE THE PEOPLE is a registered body, which assists citizens in realizing constitutional goal. The body has members including top lawyers, journalists, doctors, engineers, civil servants etc. It had some of the best lawyers as members.

On 24th April 2018, a member wrote a complaint through email to the body WE THE PEOPLE regarding exorbitant high prices of food items at Melhi Airport. Before writing complaint member took issue to the Airport manager who expressed inability to resolve the issue as these shops pays very high rental and there is no policy to check artificially high prices by such shops/ food outlets at the airport.

On 27th April 2018, WE THE PEOPLE sent the information about the matter to Competition Commission of Natta (CCN). The matters raised were:- Airport are run either by consortium of airports or by Airport Authority of Natta (AAN);Absence of policy for Greenfield airports leads to monopoly of airports and absence of supply side substitutability which is illegal; Abusement of dominant position by airports in fixing prices due to profit motive; Visibility of abuse of dominant position by taking profit maximization as sole criterion and neglecting welfare of public interest at large; Rents of these shops are artificially high and prices of food product is different inside and outside the airport; An entry fee like a tax for entry into airport has levied on entry of commercial vehicle of app based cab services and no such tax for license holder cabs; Latent and patent entry barriers are created to avoid entry entrants into the system; Such policy of Airport authorities exploit the bargaining position of the customers and the specific class of people namely ‘lay person’ who comes from humble background is being exploited.

On 3rd May 2018, the CCN sent intimation to WE THE PEOPLE. The relevant extract is as under:- Information does not contain any specifics like name names & details of entities against whom allegations are levied, details of products and services for which prices are alleged to be artificially high; No details about the contract is pointed out based on which an investigation is desired to be launched; For initiating a statutory action, appropriate details are required and the commission can provide service of an amicus to draft and file a complaint.

WE THE PEOPLE approached reputed firms but realized that most of them are on the retainers of the opposite parties. Also, they did not replied to the intimation of CCN.

There was widespread reporting of the complaint which leads to burst of public anger in form of marches and processions against Airport Authorities and their consortiums.

On 4th May 2018, Director General (DG) of CCN caused a suo-moto probe into the issue of overpricing of goods and services at airport as well as ability of airport to determine rentals and other charges.

Against this, COAON and FASO filed two petitions against suo-moto probe in Melhi High Court (HC). They also urged that airports must be given the leverage to charge suitably for non-aeronautical services. In response, on 9th May 2018, Melhi HC stayed the order of DG of CCN launching suo-moto probe.

A meeting of COAON and FASO decided to implement a policy of variable sur-charge (VSC) on goods and services. For other services like cargo and ground handling an algorithm was proposed but has not made public.

WE THE PEOPLE filed a writ petition in Dumbai HC claiming that such conduct of COAON & FASO is illegal and violate competition law. They hired Mr. Yelou, a young counsel to argue on their behalf.

On being served an advance copy, the Additional Solicitor General (ASG) entered appearance at admission stage and informed the court that an effective alternative remedy exists before CCN & hence the writ is not to be entertained.

On a resultant query from the court, the counsel for WE THE PEOPLE apprised the Court that competition laws though meant for consumer welfare are complex for the lay person and difficult to understand. Court found elements of public interest involved in petition and referred the matter to Chief Justice.

Before matter could be assigned to hear, the Union of Natta moved to Supreme Court of Natta (SCN) seeking transfer of matters pending before Melhi & Dumbai HC.

On 14th May 2018, SC granted an interim stay. During dictating the order, one puisne judge informed AG that during her recent air travel she felt overpricing is a norm at all airport. This comment was widely reported in media. Also, transfer petition was fixed for hearing on 16th May 2018. An Affidavit was filed by WE THE PEOPLE to hear complain pending before CCN along with these two petitions.

Hearing both parties, SC ordered: – Writ Petition in question is transferred to this court; SC rejected the arguments on maintainability of petition raised by COAON/FASO in light of Art. 141, 142; Transfer petitions are allowed and disposed off.



Summary of ArgumentsIssue 1.That the AAN comes under the definition of State.

It is humbly contended that the AAN is a statutory body created by an Act of Parliament. It is responsible for the operation, management, and development of civil enclaves throughout the territory of Natta. It works under the aegis of Minister of Civil Aviation MOCA. Airport Authority is a state instrumentality as it is 100% owned by the Govt., it is maintained by the concerned Ministry and also the Chairman of the AAN is appointed by the cabinet.

Issue2.That the overpricing of goods and services at Airport is not reasonable.

It is humbly contended that AAN being an instrumentality of state cannot be unjust and arbitrary in fixing the prices of the food at shops & outlets. Also, they cannot discriminate in charging the entry the entry fee from different cab services. Doctrine of fairness and good faith is to be applied so that there should be minimal or no discrimination at all and the principles of equality remain intagged due to reasonable classification.

Issue 3.That the AAN has abused their Dominant Position.

It is humbly contended that AAN being single whole and sole authority has exercised the abuse of their dominant position. The absence of separate legal framework which helps in determining prices of commodities is used as a defense to continue such gross abuse. The state protected monopolistic position helps them anyway to exploit the consumer and defeat the very purpose of a democratic form of government i.e. ‘social welfare’.

It is most humbly submitted that, AANN comes under the definition of state, Article 12 of the constitution defines the state as “In this part, unless the context otherwise requires, the State includes the Government and Parliament of Natta and the Government and Legislature of each of the states and all Local or other Authorities within the Territory of Natta or under the control of the Government of Natta.”

As per the 22nd Annual Report 2016-2017 of Airport Authority “AAN is an unlisted Statutory Corporation Constituted under the Act of Parliament i.e. AIRPORT AUTHORITY OF NATTA ACT, 1994 (“the Act”) and is 100% owned by the Government of Natta. The Board structure/composition is governed by the Act”. The members, including the official and non-official member are also appointed by the Central Government (through ministry). A careful reading of section 3, 5, 6, 12, 22, 27 of the Airport Authority Act, 1994 gives the clear idea that the Airport Authority owned by Government. Sub-section (1) of section 3 states that “with effect from the appointment day, the Central Government shall, by notification in the official gazette, constitute an authority to be called the Airports Authority of Natta”.

Sub-section 3(a) of section 3, states that “a Chairperson to be appointed by the Central Government”; sub-section 3(b) of this section provides that “the Director General of Civil Aviation, or an officer not below the rank of the Deputy Director of civil Aviation, to be appointed by the Government, ex officio.
Section 5(1) (ii) (a) provided that the central government may terminate the appointment of any whole-time member, who is not a servant of the government, after giving him notice for a period of not less than three months or, in lieu thereof, on payment of an amount equal to his salary and allowance, if any, for a period of three months.
Section 6 states that “the central Government shall remove a member if he- becomes subject to any disqualification mentioned in section 4” And also the authority functions under the rules made by central government as mentioned under section 12 of the said Act; 12A(2) provides that “no lease under section (1) shall be made without the previous approval of the central Government”.
Section 22(i) provides that with the previous approval of the central Government, charge fees, or rent” 22(ii) provides that “with due regard to the instructions that the Central Government may give to the authority from time to time charge fees rent from persons who are given by the authority any facility for carrying on any trade or business at any airport, helicopter or airstrip”;
Section 27 provides that the “authority may, with the consent of the central government or in accordance with the terms of any general or special authority given to it by the central government, borrow money from any source by the issue of bond, debenture or such other instrument as it may deem fit for discharging all or any of its functions under this act” which proves that the AAN comes under the definition of state.
The greenfield Airport policy stated that the “Airport Authority Act (the ‘AAN Act”) was enacted by the Central Government in 1994, which stated that all government airports are to be developed, financed, operated and maintained by Airport Authority of Natta.” All these section and reports states that the appointment, termination of the members of AAN, prior permission is required before making any lease, which proves that the AAN is a state.

That the AAN is maintained by Central Government.

Where a corporation is an instrumentality or agency of govt., it must be held to be an ‘authority’ within the meaning of Art. 12 and hence subject to the same basic obligation to obey the fundamental rights as the govt. where a corporation is an instrumentality or agency of govt., it would, in the exercise of its and discretion, be subject to the same constitutional or public law limitations as the govt. The rule inhibiting arbitrary action by govt. which we have discussed above must apply equally where such corporation is dealing with the public whether by way of giving jobs or entering into any contracts or otherwise, and it cannot act arbitrarily and enter into relationship with any person it likes at its sweet will, but its action must be in conformity with some principle as laid down in R.D. Shetty v. The International Airport Authority of India and ors. where Hon’ble Justice P.N. Bhagwati said:-
One thing is clear that if the entire share capital of the corporation is held by govt. it would go a long way towards indicating that the corporation is an instrumentality and agency of govt.
Where the financial assistance of the state is so much as to meet almost entire expenditure of the corporation, it would afford some indication of the corporation being impregnated with governmental character.

It may also be a relevant factor whether the corporation enjoys monopoly status which is the state conferred or state protected.

Existence of deep and pervasive state control may afford an indication that the corporation is a state agency or instrumentality.

If the functions of the corporation of public importance and closely related to governmental functions, it would be a relevant factor in classifying the corporation as an instrumentality or agency of govt.

Specifically, if a dept. of govt. is transferred into a corporation, it would be a strong factor supportive of this inference of the corporation being an instrumentality or agency of government.
If on a consideration of these relevant factors it is found that the corporation an instrumentality or agency of govt., it would, as pointed out in the R.D. Shetty case, be an authority and, therefore, State within the meaning of the expression in Art. 12.
The definition of “State” is not confined to a govt. dept. and the legislature, but extends to any action- administrative (statutory or non-statutory), judicial or quasi-judicial, which can be brought within the fold of ‘state action’ being action which violates a fundamental rights as proved in various cases
Since it is evident from the AAN Act, it is constituted for the better administration and cohesive management of Airport and civil enclaves. AAN is a ‘miniratna’ central public sector enterprise under a statute and is, inter alia, engaged in construction, modification and management of passenger terminals, development and management of cargo terminals, Air traffic services, passenger facilities etc. at various Airports at Natta. Thus, applying principles no. 3, 4, 5, laid in R.D. Shetty case and section 3, 5, 6, 12, 22, 27 of AAN Act, 1994 proves that AAN comes under the definition of Art. 12 and hence a State.
It is most humbly submitted that in the context of the instant case between WE THE PEOPLE VS. COAON & ORS., the writ petition filed under Article 32 of Indian Constitution, which guarantees the protection of the Fundamental Rights, enshrined in the Part III of the Constitution. There has been substantial violation of Fundamental Rights of the Petitioner.


Article 102 of the Treaty on the Functioning of the European Union (TFEU) regulates unilateral market power in EU competition law, and subparagraph (a) explicitly stipulates that abuse of a dominant position may consist in “imposing unfair purchase or selling prices”. This has been used to prohibit (exploitative and exclusionary) excessive prices that are ‘too high’, and (exclusionary) predatory prices that are ‘too low’. In contrast to predatory pricing, the abuse of excessive pricing has remained underdeveloped conceptually and in practice at the EU level. According to the European Court of Justice (ECJ) in United Brands a price is excessive if “it has no reasonable relation to the economic value of the product” and this can be determined by a twofold test: it should be shown that (i) the price-cost margin is excessive and (ii) the price imposed “is either unfair in itself or when compared to competing products” (paras 250-252). The European Commission recently followed this test in Scandlines and highlighted a number of difficulties. It was argued that even if it were possible to prove that a price-cost margin is excessive, there is little guidance as to whether a price is unfair when comparison are drawn, if it is possible to make such comparisons at all (paras 163, 169 et seq).

In United Brand the ECJ stated that economists have developed ways to determine whether a price is unfair (para. 253). Although this was optimistic at the time, more recent advances in the economics of fairness have further our understanding of when prices are unfair. The principle of dual entitlement (Kahneman et al, `1986a, 1986b) can be applied constructively to aid the interpretation of this area of law where conventional economic theory is unhelpful. This principle states that transactors are ‘entitled’ to the terms of trade of a reference transaction, and it is ‘unfair’ if a firm charges a price that realizes a gain at the expense of its customers’ entitlement. Given it can explain when a price is unfair relative to another, it is a natural candidate to be used to define a price as unfair in the second stage of the United Brands test if it is consistent with the aims of an excessive pricing prohibition. It show that in general it is aligned with the goals of an effective prohibition of excessive prices, because it states that, other things equal, a higher price is unfair if caused by a lack of competition but it is not if due to the firm’s production costs. Furthermore, it outlines a simple procedure to determine when a price is unfair compared to a reference transaction, which may improve the ex-ante legal certainty of the United Brands test and leads to more effective prohibition. Finally, we compare our procedure with the case law and show that European competition law enforces have followed similar arguments in their attempts to define prices as unfair when compared to others, but disparities occur in attempts to define prices as unfair in themselves.
Repelling the State’s plea that statutory bodies were not ‘other authorities’ under Art. 12, Ray, C.J. observed, –
The State undertakes commercial functions in combination with Governmental functions in a welfare state. Governmental function must be authorities. It must be able to impose decision by or under law with authority. The element of authority is of a binding character. The rules and regulations are authoritative because these rules and regulations direct and control not only the exercise of powers by the Corporations but also all people who deal with these corporations.
Hon’ble Court held in earlier decisions that the expression “other authorities” in Article 12 includes all constitutional or statutory authorities on whom the powers are conferred by law. The State itself is envisaged under Article 298 as having the right to carry on trade and business. The State as defined in Article 12 is comprehended to include bodies created for the purpose of promoting economic interests of the people.

Applicability of Doctrine of fairness and good faith.

It was held in the case of Board of Control for Cricket, India v. Netaji Cricket Club, the Board is a society registered under the Tamil Naidu Societies Registration Act. It enjoys a monopoly status as regard regulation of a sport in terms of its Memorandum of Association and Articles of Association. It controls the sport of cricket and lays down the law therefor. It inter alia enjoys benefits by way of tax exemption and right to use stadia at nominal annual rent. It earns huge revenue not only by selling ticket to the viewers but also selling right to exhibit films live on TV and broadcasting the same. Ordinarily, its full members are the State Association except, Association of Indian Universities, Railway Sports Control Board and Services Sports Control Board. As a member of ICC, it represents the country in the international foras. It exercises enormous public functions. It has authority to select players, umpires and other officers the rules of the board clearly demonstrate that without it recognition no competitive cricket can be hosted either within or outside the country. Its control over the sports of competitive cricket is deep, pervasive and complete.
In the present case, AAN is a ‘miniratna’ central public sector enterprise constituted under a statute and is, inter alia, engaged in construction, modification and management of passenger terminals, development and management of cargo terminals, air traffic services, passenger facilities, etc. at various airports in Natta. It is also responsible for the appointment and termination of officers, and employees. It controls the civil aviation and hence earns huge revenue by way of non-aeronautical revenue.
In law there cannot be any dispute that having regard to the enormity powers exercised by it, the AAN is bound to follow the doctrine of ‘fairness’ and ‘good faith’ in all its activities. Having regard to the fact that it has to fulfill hopes and aspiration of millions, it has a duty to act reasonably. It cannot be acts arbitrarily, whimsically or capriciously. As the AAN controls all the civil enclaves, its action is required to be judged and viewed by higher standards.
Article 14 envisages absence of any arbitrary discrimination.
“Equality before the law equal” or “equal protection of the laws” within the meaning of Art. 14 of the Constitution of Natta mean absence of any arbitrary discrimination by the law or in their any administration. No undue favor to one or hostile discrimination to another should be shown. A classification is reasonable when it is not arbitrary selection but rests on difference pertinent to the subject in respect of which the classification is made. The classification permissible must be based on some real and substantial distinction, a just and reasonable relation to the object sought to be attained and cannot be made arbitrary and without any substantial basis.
Same was held in the case of Erusian equipment and chemical Ltd. V, State of West Bengal the Court said “the govt. is a govt. of laws and not of man. It is true that neither the petitioner nor the respondent has any right to enter into contract but they are entitled to equal treatment with others who offer tender or quotation for the purchase of the goods. This privilege arises because it is the govt. which is trading with the public and the democratic form of govt. demands equality and absence of arbitrariness and discrimination in such transaction. The activities of the govt. have a public element; therefore, there should be fairness in the equality.”
Concept of equality- Reasonable classification inherent therein.

It is now well settled that what Art. 14 c forbid is hostile discrimination and not reasonable classification. Equality before law does not mean that the same set of law should apply to all persons under every circumstance ignoring differences and disparities between man and things. A reasonable classification is inherent in the very concept of equality, because all persons living on this earth are not alike and have different problems.

In the case of State of Kerala and Anr. v. N.M. Thomas and Ors. Justice Fazal Ali while delivering the concurring judgments observed as follows regarding the various aspects of the concept of equality:
“It is also equally well settled by several authority of this court that Art. 16 is merely an incident of Art. 14. Art. 14 being the genus is of universal application whereas Art. 16 is the species and seeks to obtain equality of opportunity in the services under the state. The theory of reasonable classification is implicit and inherent in the concept of equality for there can hardly be any country where all the citizens would be equal in all respect.

State action must be fair and reasonable.

In the case of Satav infrastructure Pvt. Ltd. V. Union of India Justice Navanati Prasad Singh said, “Merely because State or State instrumentality has entered into a contractual obligation it is not absolved of its responsibilities u/Art.14 of the constitution in addition to contractual obligations. This distinction, which is now well established and it is this that distinguished its action from that of an ordinary citizen to whom or to whose actions Art. 14 of the constitution does not apply. Thus, all actions of State or state instrumentality including those in relation to contractual sphere have to be tested not only on contractual basis but on the anvil of article 14 as well. If it is found that the action lacking in reasonableness and fairness then notwithstanding contractual terms the action will be quashed and this court would be constitutionally obliged to do the same. Now, it is establish beyond doubt that every state action must be fair and reasonable and what is reasonableness is well established. One of the tests would be what is well known as “Wednesbury principal of reasonableness.” Where no reasonable man would act in a manner in which, under the facts and circumstances the state has acted then the actions of the State would be deemed to be unreasonable. Reasonableness and fairness, is the heart and soul of Art.14 and every state action or action of State instrumentality has to thus conform to it, irrespective of their field of their operation.”
It is humbly submitted that, The Competition Act 2002 provides for the establishment of CCI to prevent those malpractices that adversely affect competition. Additionally, it was enacted to promote and sustain competition in markets as well as to protect the interests of consumers. Sub- Section (1) of Section 4 provides that no enterprise or group shall abuse its dominant position. It is not the dominant position but its abuse which is prohibited. The Competition Commission is the sole authority to receive complaints against the infringement of Competition Law from individuals, business firms, and entities, Central or State Governments. Thus, it was enacted to ensure free and fair trade amongst participants in Indian markets and such other matters connected therewith. It provides for both substantive and procedural provisions of Law. The Competition Commission of Natta shall have the following two basic functions;
a. Administration and enforcement of Competition Law and Competition Policy to foster economic efficiency and consumer welfare.
b. Involvement proactively in Governmental policy formulation to ensure that markets remain fair, free, opens flexible and adaptable.
The preamble of the competition Act and sec. 18 mandates the commission to “protect the interest of the consumers” and it is important to ensure that consumer’s surplus is not adversely impacted. The competitive forces that the seller may face are challenges from existing competitors, entry of new competitors, or from newer rival products. Healthy competition among the sellers promotes productive and allocative efficiency and optimizes consumer surplus. However, there are cause for concerns when the measures taken by the sellers include conscious action intended to create entry barriers, drive out existing rivals, control output or price, impose restrictive and supplementary obligations on captive consumers, impose unfair or discriminatory conditions or prices to the disadvantage of consumers or rival firms or leverage strength in one market to enter or protect another market. To avoid the challenges from newer, more efficient and innovative products seller may also take measures to thwart technical or scientific development in market. Such conduct is considered anti- competitive and comes under the scanner of competition laws therefore for the purpose explanation (a) (i) to sec. 4, it is important to examine the ability of an enterprise to operate independently of competitive forces generated by its rivals.
In this case WE THE PEOPLE v. COAON ; Ors. the petitioner has alleged creation of entry barriers imposing unfair or discriminatory conditions or prices to the disadvantaged of consumers. AAN being the whole and sole authority for operation and management of all airports in Natta charge differential price ; license holder cabs ; commercial vehicles of App based cab services. Also the arbitrary charging of food prices without having the knowledge of economic background of the visitors is unfair and hence defeating the interest of consumers.
Statutory Monopoly.

In GHCL LTD V. COAL INDIA LTD (CIL), the dominant position of CIL was acquired as a result of the policy of govt. of India by creating a public sector undertaking in the name of CIL and vesting the ownership of the private mines in it. Thus, CIL and its subsidiaries faced no competitive pressure in the market and there was no challenge at the horizontal level against the market power of the opposite parties.

In the IRCTC Case, the DG while assessing the dominance examined the various factors enumerated in Sec 19(4) of the Act and Found IR and IRCTC as a “group” to be in a dominant position. The commission noted that IR being the main entity undertaking Railway Transportation of passenger in the country commanded the largest market share and thereby had a monopoly over railway operations in India with no competitors present in the relevant market despite there being no legal barriers to entry of competitors and only subject to policy decision being taken by the govt. in this regard. IRCTC incorporated as an extended arm of IR is wholly own subsidiary of MoR. The commission therefore in the light of undisputed facts was in agreement with the DG and held that MoR (IR) and IRCTC formed “group” for the purpose of the Act and also dominant in the relevant market.
In the present case, AAN is an authority created by the statute of Parliament. It is the whole and soul authority for the operation, management and development of authority. Being a corporation created by statute, it has the monopoly to make rules and regulations and also to follow any practice of their kind and hence they are dominant in their particular sphere. In continuation of such practice, the basic principles and objectives of Competition law has been violated.

It is humbly submitted that the practice of retaining law firms or lawyers so as to cripple the legal assistance available to opponent is not only unethical but also illegal and must be proscribed.
That there a direct relationship between competition advocacy and enforcement of competition law. The aim of competition advocacy is to foster conditions that will lead to a more competitive market structure and business behavior without the direct intervention of the competition law authority i.e. the CCN.

Competition Advocacy refers to those activities conducted by the competition authority related to the promotion of a competition environment for economic activities by means of non-enforcement mechanism mainly through its relationship with other governmental entities by increasing public awareness of the benefit of competition
A successful competition advocacy can be viewed in terms of the following:
CCN must develop relationship with the ministries and department of the govt., regulatory agencies and other bodies that formulate and administer policies affecting demand and supply position in various markets. Such relationships will facilitate communication and a search for alternatives that are less harmful to competition and consumer welfare.
CCN should encourage debate on competition and promote a better and more informed information decision making.

Competition Advocacy must be open and transparent to safeguard the integrity and capability of the CCN. When confidentiality is required CCN should publish news releases explaining why, and
Competition Advocacy can be enhanced by the CCN establishing good media relation and explaining the role and importance of competition policy/law as an integral part of the govt. economic framework.
Ghanshyam Das Vij Bajaj Corp Ltd. Sonipat Distributor FMCG association and its office bearers were directed to cease and desist from indulging in the acts/conducts which had been found in contravention of the provisions of the act. Further, it was ordered that the association should modify its bye-laws in light of the contraventions found and observation made by the commission in its order so as to bring the same in accord with the provisions of the Act. Further, in exercise of the power u/s 27(g) of the act, the commission directed the Association to put in place, in letter and in spirit, a ‘competition compliance manual’ to educate its members about the basic tenets of competition law principles and the association was advised to play an active role in creating awareness amongst its members of the provisions of the act through competition advocacy. .

PrayerWherefore, in the light of the facts stated, arguments advanced and authorities cited, it is most humbly prayed and implored before the Hon’ble Supreme Court of Natta, that it may be graciously pleased to adjudge and declare that:
Airport Authority of Natta is an instrumentality of state under Article 12 of the Constitution of Natta.

Being an instrumentality of State dominant position has been abused by Airport Authorities.

Order Union of Natta to create necessary framework for keeping the check on the artificially high pricing at such shops/outlets at Airport.

Similar entry fee for entry into Airports on commercial vehicles of app based cab services and license holder cabs.

Order COAON & ors. to release the details of algorithm for services like cargo and ground handling in public domain.
Also, pass any other order that it may deem fit in the favour of the PETITIONERS to meet the ends of equity, justice and good conscience.
For this act of Kindness, the Petitioners shall duty bound forever pray.
Place: NATTA S/d
Dated: 16th May 2018 Counsel for Petitioner

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