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2023 (6) TMI 1059 - HC - Companies LawSeeking mandamus in relation to an ongoing investigation and seek compliance of sections 217 and 220 of The Companies Act, 2013 - jurisdiction to hear the present writ petition on the same cause of action - whether the present writ petition is barred by the principle of constructive res judicata? - HELD THAT - The statutory position under section 212 of The Companies Act, 2013 and the decision of the Supreme Court in Rahul Modi 2019 (3) TMI 1411 - SUPREME COURT , discourage passing of orders which would be contrary to law. The observations made with regard to the legitimate expectation of the petitioners for completion of the investigation within a reasonable time frame however remains. The SFIO is hence expected to act in terms of such legitimate expectation as well as the principles of equity and fair play with regard to completing the investigation within a reasonable time frame. Application disposed off.
Issues Involved:
1. Maintainability of the writ petition. 2. Request for a stay of the investigation and submission of a report by SFIO. 3. Preservation of CCTV recordings and compliance with Supreme Court directives. Summary: 1. Maintainability of the Writ Petition: The petitioners sought a Mandamus against the SFIO and its Directors for compliance with sections 217 and 220 of The Companies Act, 2013. The respondents argued that the writ petition is barred by the doctrine of constructive res judicata, citing a similar case dismissed by the Gujarat High Court. However, the Court found that part of the cause of action arose within its jurisdiction and that the petitioners' writ petition in the Calcutta High Court predated the one in Gujarat. The differences in the array of parties and the nature of relief sought further diluted the application of res judicata. The Court concluded that the present writ petition is maintainable. 2. Request for Stay of Investigation and Submission of Report: The petitioners filed CAN 1 of 2022 and CAN 2 of 2023, seeking a stay of the investigation until SFIO submits a report and preservation of CCTV recordings. The Court noted that Section 212 of The Companies Act, 2013, which governs SFIO investigations, does not specify a timeframe for completing investigations. The Supreme Court in Serious Fraud Investigation Office vs. Rahul Modi also held that there is no fixed period for submitting the investigation report. Despite the statutory position, the Court emphasized that principles of equity and natural justice demand that SFIO should indicate a reasonable timeframe for completing the investigation. The Court did not grant the prayer for a stay of the investigation but highlighted the petitioners' legitimate expectation for timely completion. 3. Preservation of CCTV Recordings and Compliance with Supreme Court Directives: The petitioners requested the preservation of CCTV footage in compliance with the Supreme Court's directive in Paramvir Singh Saini vs. Baljit Singh. While the Court did not grant prayers outside the scope of Section 212, it directed SFIO to comply with the Supreme Court's directions, including preserving evidence and CCTV recordings. The Court also expected SFIO to avoid unnecessary and frequent physical appearances by the petitioners unless required for the investigation. Conclusion: The Court disposed of CAN 1 of 2022 and CAN 2 of 2023, emphasizing SFIO's obligation to act within a reasonable timeframe and comply with principles of equity and fair play. The petitioners were given leave to press for other prayers in the writ petition before the appropriate Court.
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