2013 (12) TMI 1654 - Board - Companies Law

Summary

Issues involved: Company petition under section 237 seeking opinion for initiation of investigation by the Central Government, maintainability of the petition, qualifications of the petitioners under section 237 (b) of the Companies Act.

Summary:
The petitioner filed a company petition under section 237 seeking the opinion of the Bench for the initiation of an investigation by the Central Government. Initially, the petitioner requested notices to be issued to the parties, but later filed for deletion of certain respondents from the petition. The petitioner filed multiple applications in the petition, sometimes after orders were passed, insisting on being heard each time the matter came before the Bench.

The Bench noted that as a Judicial Authority, it could not decide on issues or form an opinion against any party in the absence of the indicted party. The petitioner argued that the accused party need not be heard before passing investigation orders, citing a High Court decision under the Competition Act, but the Bench found no analogous provision under the Companies Act for such a procedure.

Regarding section 237 of the Companies Act, the Bench explained the provisions under subsections (a) and (b) which empower the Central Government to appoint inspectors or initiate investigations based on specific criteria related to fraudulent conduct, misfeasance, or lack of information provided to members.

The petitioner raised objections to the maintainability of the petition, but the Bench found that the petitioners did not qualify under any of the clauses of section 237 (b) of the Act. As the petitioners were not members, creditors, or directly affected by the company's affairs, the Bench dismissed the petition as misconceived, closing all pending applications.

In conclusion, the Bench dismissed the petition and all pending applications, noting the petitioner's frustration at no costs being imposed along with the dismissal.