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2019 (12) TMI 1607 - HC - Companies Law


Issues Involved:
1. Legality of FIR registrations against the petitioners.
2. Jurisdiction of police versus Serious Fraud Investigation Office (SFIO).
3. Applicability of Companies Act, 2013 versus Telangana Protection of Depositors of Financial Establishments Act, 1999.
4. Right to fair investigation and trial.
5. Conditions for bail and cooperation with investigation.

Issue-wise Detailed Analysis:

1. Legality of FIR Registrations Against the Petitioners:
The petitioners challenged the registration of multiple FIRs as illegal, arbitrary, unconstitutional, and violative of principles of natural justice and fundamental rights. They argued that the police had no authority to register FIRs under the Companies Act, 2013, citing Sections 212(2), 435(6), and 436. The petitioners contended that grievances related to company investments should be addressed by the Registrar of Companies or the SFIO, not the police.

2. Jurisdiction of Police Versus Serious Fraud Investigation Office (SFIO):
The petitioners argued that once the SFIO is involved, no other investigation agency, including the police, should proceed with the investigation. The Government Pleader for Home countered that the police have jurisdiction to investigate offences under the Indian Penal Code (IPC) and the Telangana Protection of Depositors of Financial Establishments Act, 1999. The court noted that the SFIO, as per Section 212 of the Companies Act, has exclusive jurisdiction over company-related frauds, and any other investigating agency must transfer relevant information to the SFIO.

3. Applicability of Companies Act, 2013 Versus Telangana Protection of Depositors of Financial Establishments Act, 1999:
The petitioners claimed that the Companies Act, a central legislation, should prevail over the state legislation of Telangana Protection of Depositors of Financial Establishments Act, 1999. They argued that the alleged offences fall under the Companies Act, which requires specialized investigation by the SFIO. The court agreed, emphasizing that offences related to company affairs require special investigation skills and should be handled by the SFIO.

4. Right to Fair Investigation and Trial:
The court highlighted the importance of fair and transparent investigation and trial, protected under Articles 14, 21, and 39-A of the Constitution of India. It noted that the investigation should be free from bias and prejudice, ensuring justice for both the accused and the victims. The court observed that the petitioners were being subjected to multiple investigations by different police stations, causing harassment and prejudice.

5. Conditions for Bail and Cooperation with Investigation:
The court directed the release of the 2nd petitioner on bail, subject to certain conditions, including furnishing a personal bond, depositing a significant amount, and cooperating with the SFIO investigation. The court emphasized that the 2nd petitioner should not leave the country without permission, surrender her passport, and not interfere with the investigation or intimidate the investors.

Conclusion:
The court concluded that the offences alleged against the petitioners fall within the purview of the Companies Act, 2013, and should be investigated by the SFIO. It directed the transfer of all relevant FIRs to the SFIO for investigation and set conditions for the 2nd petitioner's bail to ensure cooperation with the investigation and protection of investors' interests. The court emphasized the need for a fair and specialized investigation to uphold the rule of law and justice.

 

 

 

 

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