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TMI Blog2013 (7) TMI 27X X X X Extracts X X X X X X X X Extracts X X X X ..... is for the Central Government to decide which authority would investigate. Be that as it may, the report of SFIO would clearly show, despite being informed, the company did not appear. Hence, Mr. Mookherjee was not right in saying, opportunity was not given. There seems to be no irregularity. It is a fit and proper case for the Central Government to consider as to whether an investigation should be carried out by appropriate agency having authority in law followed by action that is permitted in law. Considering the backdrop, we do not feel it inclined to permit the appellant to proceed with the proposed scheme of amalgamation. Hence, the application for convening meeting of the shareholders treating the same as on the day’s list dismissed. - A.P.O. No. 119 of 2013, A.P.O. No. 164 of 2013, A.P.O. No. 165 of 2013, A.P.O. No. 172 of 2013, C.A. No. 250 of 2012 - - - Dated:- 19-6-2013 - Ashim Kumar Banerjee And Dr. Mrinal Kanti Chaudhuri,JJ. For the Appellant : Mr. S.B. Mookherjee, Senior Advocate, Mr. Aniruddha Mitra, Advocate, Mr. A.K. Upadhyay, Advocate For the Respondent : Mr. Bhaskar Prasad Banerjee, Advocate JUDGMENT Ashim Kumar Banerjee, J. Facts : ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... without any registration. His Lordship passed an order on May 16, 2013, directing Reserve Bank to take further steps in the matter and directed matter to appear on June 4, 2013. The Company preferred four appeals against the orders dated February 11, 2013; March 21, 2013; April 26, 2013 and May 10, 2013. We heard all the four appeals on the abovementioned dates and intend to dispose of the same by this common judgment and order. From the backdrop as discussed above, it would be clear, we did not interfere with the exercise that His Lordship undertook to conduct an investigation into the affairs of the company that raised doubt in the mind of His Lordship. The present four appeals would relate to further orders passed from time to time by His Lordship. At the instance of His Lordship, the Central Government engaged Serious Fraud Investigation Office (hereinafter referred to as SFIO ) who submitted a detailed report. His Lordship thereafter directed the Reserve Bank to carry on an investigation. Reserve Bank submitted a preliminary report observing, the company may have carried on business as a non-banking financial company without obtaining registration with the Reserve Bank ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e paper book to contend, the company duly paid tax that was assessed by the appropriate authority under the Income Tax Act. Mr. Mookherjee would rely upon the following decisions :- 1. 2002 Volume-X Supreme Court Cases page-498 (Rainbow Denim Ltd. Vs. Rama Petrochemicals Ltd.); 2. 2009 Volume II Supreme Court Cases page-547 (Chembra Orchard Produce Ltd. Ors. Vs. Regional Director of Company Affairs and Anr.); 3. 37 Company Cases page-195 (In the matter of Bangeswari Cotton Mills Ltd.); 4. 38 Company Cases page-197 (In Re W.A. Beardsell and Company Pvt. Ltd. and Mettur Industries Ltd.); 5. 1961 Volume-III All England Law Report page-1169 (Macfoy Vs. United Africa Company Ltd.); 6. All India Reporter 1981 Supreme Court page-1218 (Needle Industries (India) Ltd. and Ors. Vs. Needle Industries Newey (India) Holdings Ltd. Ors.); 7. 2005 Volume I Supreme Court Cases page-212 (Dale Carrington Invt. (P) Ltd. Anr. Vs. P.K. Prathapant Ors.); Mr. Mookherjee raised the issue of bias by contending, His Lordship allowed at least three petitions in the matters of Pincha Home Builders Pvt. Ltd. Anr, Lucknow Properties Finance Pvt. Ltd. Ors. and Vanilla Goods that w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 391 it would be in the sole discretion of the learned Judge whether such notice would be given at the initial stage or at the final stage. Mr. Banerjee would further contend, Registrar of Companies had the expertise to carry on such investigation. Learned Judge did not commit any illegality directing such authority to carry on investigation to remove the doubt in His mind. Mr. Banerjee placed the affidavit filed by Regional Director wherein the Regional Director clearly observed, one of the companies was used as a conduit for Money Laundering that would attract serious steps as against the persons being in the management and control of the company. We have considered the rival contentions. Section 391 imposed wide discretion upon the learned Judge. Learned Judge expressed doubt as to the function of the company. Such doubt ultimately came true as we find from the reports particularly of the SFIO. Hence, before the company was permitted to go ahead with the scheme, the Court was duty bound to remove doubt if any, in its mind as to whether such scheme was being propounded for an oblique purpose. The Court was not a mere Rubber Stamp as observed by the Bombay High Court in the cas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sent case we find, His Lordship passed series of orders directing various agencies to carry out investigations. Looking to the facts we are in full agreement with His Lordship, there would certainly be a justification to carry on investigation. If we look to the Income Tax Assessment order relied on by Mr. Mookherjee appearing at pages 298-299 we would find, for the assessment year 2007-2008 the Company earned net profit for Rs.290/-. They suffered penalty. The total income that was assessed was Rs.3,400/- only and the company paid tax for Rs.1,046/-. Such an insignificant company proposed scheme of amalgamation involving crores through allotment of shares at a huge premium. However, His Lordship was perhaps not correct in either directing Director, Revenue Intelligence or the Reserve Bank of India. His Lordship was competent to issue direction under Section 237(a)(ii). His Lordship was right in sending the issue to the Ministry of Corporate Affairs being the appropriate authority of the Central Government. However, it is for the Central Government to decide which authority would investigate. Be that as it may, the report of SFIO would clearly show, despite being informed, the comp ..... X X X X Extracts X X X X X X X X Extracts X X X X
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