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2023 (9) TMI 1104 - HC - Companies LawComplaint against fraudulent and illegal siphoning of funds - running Ponzi Scheme in the name of illegal Assured Return - Validity of second complaint / FIR on the same issue which was already pending - Maintainability of impugned FIR and the proceedings emanating therefrom - pendency of earlier SFIO proceedings initiated pursuant to first complaint to the Central Government(MCA) on 14.10.2021 under Section 212 of Companies Act, 2013 - allegation made in first complaint and second complaint are same or not - effects of the provisions contained in Section 212 of the Act. HELD THAT - In the opinion of this Court, it could not have been the intention of the legislature for allowing any parallel proceedings to be conducted by any other agency as it would not only be futile but also entail more confusion and trouble, particularly if there are diverse decisions/ outcome from two or more different sets of proceedings. The same would tantamount to sheer abuse of the process of law. Once an investigation has been initiated by the SFIO under Section 212 of the 2013 Act, a parallel investigation by a separate agency into the affairs of the Company, considering the bar under Section 212(2), is not permissible. As per the facts involved herein, admittedly, the SFIO had already filed numerous Interim Report(s) before this Court and before NCLT. The only difference between the first complaint resulting in the SFIO proceedings made by respondent no. 2 and the second complaint resulting in the registration of the impugned FIR also made by the respondent no. 2 is that the said respondent in the end of the complaint has instead of using the words cannot be done by any other agency except SFIO Department in the initial complaint made to the MCA cleverly replaced it with the words cannot be done by any other agency except EOW with a view to include Section(s) 406/ 420/ 120B IPC, since the offence of fraud per-se does not find mention in the IPC. The same, in the opinion of this Court, does not make an iota of difference as it seems to be a deliberate act. As such, the respondent no. 2 cannot be given any benefit of the same. It is trite law that subsistence of two FIRs is not maintainable as they can neither be filed nor allowed to co-exist or continue at the same time, particularly, whence they are arising out of the same set of facts and allegations, more so, whence the complainant happens to be the same in both the FIRs. Thus, in such an event, in the opinion of this Court and as laid down by the Hon ble Supreme Court, the subsequent FIR calls for quashing as the fundamental right of a citizen/ person as provided under Part III of The Constitution of India and the power of the Police under Cr.P.C. has to be balanced and a person cannot be subjected to fresh investigation(s) under the same set of allegations qua the same offence(s). Taking into the account the aforesaid, more particularly Section 212(2) read with Section 212(17)(a) of the Act, this Court is of the opinion that it would be in the interest of justice and benefit of the general public and the money and resources involved and also all the parties involved herein, if the impugned FIR is transferred to the SFIO, which shall take over the same along with the already pending proceedings before it arising out of the complaint dated 14.06.2021. There is no doubt about the fact that the SFIO proceedings can proceed with respect to the offences under the 2013 Act and also under the IPC. In fact, it is not the other way around as the EOW cannot take over the investigation qua the offence(s) under the 2013 Act which is the specific domain of the SFIO, is a matter of fact which needs not be gone into by this Court as the same is not involved herein. The second complaint dated 15.08.2021 to the EOW resulting in registration of the impugned FIR is not maintainable in the current form, moreover, whence the first complaint dated 14.06.2021 and the second complaint dated 15.08.2021 are verbatim and are involving the same set of facts and are against the very same individual(s) and are made by the same complainant i.e., respondent no. 2. Further, in view of Section 212(17)(a) read with Section 212(2) of the 2013 Act and based upon all the contentions raised by the learned (senior) counsels for the parties coupled with the documents on record, in the considered opinion of this Court, the impugned FIR is liable to be quashed and transferred to the SFIO as the proceedings thereunder are not maintainable in the eyes of law. Petition disposed off.
Issues Involved:
1. Whether the impugned FIR dated 12.01.2023 before the EOW and the proceedings emanating therefrom are maintainable in view of the pendency of earlier SFIO proceedings initiated pursuant to the first complaint to the Central Government (MCA) on 14.10.2021 under Section 212 of the 2013 Act? 2. Whether the allegations made in the first complaint dated 14.06.2021 to the MCA and in the second complaint dated 15.08.2021 to the EOW are similar/same involving the same set of facts containing the same allegations made against the same individual(s) by the same complainant? 3. What are the effects of the provisions contained in Section 212 of the 2013 Act upon the factual matrix of the case? Summary: Issue 1: Maintainability of FIR in View of SFIO Proceedings The petitioner sought quashing of FIR No. 06/2023 dated 12.01.2023 registered under Sections 406/420/120-B IPC at P.S. Economic Offences Wing, New Delhi, on the grounds that the same issues were already under investigation by the Serious Fraud Investigation Office (SFIO) pursuant to a complaint dated 14.06.2021. The court noted that once the SFIO is assigned a case under Section 212(1) of the Companies Act, 2013, no other investigating agency can proceed with the investigation in respect of any offence under this Act, as per Section 212(2). Therefore, the impugned FIR is not maintainable and should be quashed. Issue 2: Similarity of Allegations in Both Complaints The court observed that both the first complaint to the MCA and the second complaint to the EOW are verbatim copies of each other, with the same allegations and against the same individuals. The only difference lies in the last paragraph, where the provisions of law have been changed. Since the allegations in the impugned FIR are already covered under the SFIO proceedings, the FIR is deemed redundant and an abuse of the process of law. Issue 3: Effects of Section 212 of the Companies Act, 2013 Section 212 of the Companies Act, 2013, is a complete code in itself, providing for the investigation by the SFIO into the affairs of a company. Once an investigation is assigned to the SFIO, no other agency can investigate the same offences under this Act. The court emphasized that the SFIO is a specialized body with experts from various fields, and its investigation takes precedence over any parallel proceedings by other agencies. Therefore, the impugned FIR should be transferred to the SFIO. Conclusion: The court quashed FIR No. 06/2023 dated 12.01.2023 registered under Sections 406/420/120-B IPC at P.S. Economic Offences Wing, New Delhi, qua the petitioner, and directed that all documents available with the EOW be transferred to the SFIO within four weeks. The SFIO, already seized of the investigation, will continue its proceedings as per the complaint dated 14.06.2021.
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