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TMI Blog2016 (12) TMI 1824X X X X Extracts X X X X X X X X Extracts X X X X ..... ing an order for the conducting an investigation into the affairs of the company , as mentioned below clause (a) of Section 213 is applicable in all cases and the applicant(s), whoever prefers application under Section 213, whether they belong to category as mentioned in clause (a) or clause (b), such evidence is required to be relied upon not only to justify the allegations, but also to Show that there is a good reason for seeking an order, to enable the TribunaI to form its opinion - The other basic principle of justice delivery system that a court or a Tribunal while passing an order is not only required to give good reason based on record/evidence but also required to show that after being satisfied itself the Court/ Tribunal has passed such order. The sentence if it is satisfied that there are circumstances suggest mentioned in clause (b) of Section 213 is applicable to all cases, irrespective of the category to which the applicant(s) belong i.e. clause (a) or clause(b) of Section 213 of the Act - The Tribunal is not expected to refer all the evidence to form opinion about the malpractice or for fraud mentioned in sub-clause (i), (ii) and (iii). It is the-job of the Inspecting ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as follows: - The appellant is a company incorporated under the Companies Act 1956 to carry out business in the field of renewable The appellant was to setup a 99.45 MW of wind power project at Satara district, Maharashtra by investing ₹ 634 Crores, out of which Power Finance Corporation (hereinafter referred to as "PFC") was funding ₹ 487 Crores and the remaining ₹ 147 Crores was to be infused by the appellant by way of equity. 3. 1st Respondent is a Public Limited Company and a wholly own m subsidiary of India Ltd., which in turn is promoted by PFC amongst other entities. 4. 1st Respondent entered into an Equity Subscription Agreement [hereinafter referred to as "ESA"] with the appellant, whereby it subscribed to 37% equity Share capital of the appellant, after carrying out a thorough due diligence. 1st Respondent invested a total of approximately ₹ 61 Crores in the equity of the appellant till date. 5. One "M/S Vestas RRB Energy" was supposed to supply wind turbine generators (WTG for short) for the aforesaid project, however, it backed out in between and the appellant group and the respondent group discussed the possibilities of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pse of more than one year that 1st Respondent on 30th July 2012 for the very first time raised an objection with respect to grant of corporate guarantee. 13. Three years thereafter i.e. on 7th May 2015, 1st Respondent filed a criminal complaint before the EOW against the Appellant and its Promoters/ Directors levelling allegations of fraud and cheating against them; Similarly, the sister concern of 1st Respondent i.e., PEL also filed a criminal complaint against RSIGEPL and its Promoters/ Directors before EOW. The EOW carried out a thorough investigation into the affairs of the Appellant and RSIGEPL over a period of seven-eight months and finally Closed the aforesaid two complaints as no irregularities were found, In fact, the statements made before EOW by Mr. R.Nagarajan, who is Director (Finance) in PFC and is also a Director in 1st Respondent and by Mr. T.N. Thakur who was not only the Chairman of 1st Respondent but was also the Non-Executive Chairman of the Appellant till 23rd February 2011 , were exculpatory in nature. 14. As the EOW complaint did not bear any fruitful results for the 1st Respondent and its sister concern PEL, both of them filed separate company petitions be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... were required by the 1st Respondent for adjudication of the main petition. Considering that the said prayer must have been made with respect to the documents and information pertaining to the Appellant company the counsel appearing for the Appellant in a bonafide manner submitted before the CLB that the counsel for the 1st Respondent may send a communication for the required information/document(s) and the same shall be furnished by the Appellant within two weeks from receipt of such communication. 21. On 15th January 2016, the 1st Respondent wrote a letter to the Appellant seeking a series of documents/information pertaining to not just the Appellant but also pertaining to various other companies such as R.S.India Infrapower Private Ltd., Anandrao Infrastructure Pvt. Ltd. and Powerwind Ltd. knowing fully well that the said companies were separate legal entries and the information with respect to those companies were Confidential and Could not have been provided for the asking and that too by the Appellant. 22. Learned Senior Counsel for the Appellant contended that the contents of the letter dated 15tmJanuary 2016 sent by the 1st Respondent itseif shows that the 1st Respondent i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 16 which is under challenge in the present appeal. 25. Learned Senior Counsel appearing for the Appellant submitted that the application under Section 213 of the Companies Act 2013 was filed in March 0016 under Regulation No. 44 of the Company Law Board Regulations 1991 when Section 213 was not in force. It came into effect much later w:e.f. 1st June 2016. In spite of the same the impugned order has been passed by Tribunal under sub-clause (b)(i) of Section 213 of the Companies Act, 2013. The said sub-clause (b)(i) of Section 213 confers the authority upon Tribunal to pass orders for investigation into the affairs of a Company under the said provision, even "otherwise" than an application made to it by the members of a Company or by any other person. 26. It is further contended that an order can be passed by the Tribunal under sub Section (b) of Section 213, "otherwise" than an application filed by the members of the Company or any other person, if the ingredients laid down in-either one or more of the sub-clauses (i) to (iii) thereof is satisfied. According to Learned Senior Counsel for the Appellant, the ingredients laid down in either one or more of sub-clauses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... us period of time are not even signed. Hence, their genuineness is extremely doubtful. 31. It was further contended that the Appellant adduced sufficient before the Tribunal to show that all steps were taken in accordance with resolutions passed in the minutes of the meeting of the Board of Directors of the Appellant and were duly reflected in the Audited Balance Sheets of the Appellant which were approved by the Board of Directors and in the respective AGM meeting. 32. It was also contended that the Tribunal erroneously held that fit is whether the alleged alterations/ improper recording of the minutes has extended any advantage to the Appellant Company or not, or 'whether such alterations were not within the knowledge of 1st Respondent'. The thrust of the argument was that the Tribunal passed the impugned order without recording its satisfaction in regard to ingredients suggested under sub Section (b)(i) of Section 213 of the Companies Act 2013. 33. On the other hand according to learned counsel for the 1st Respondent it is Within the jurisdiction of the Tribunal to order investigation into the Company's affairs if the member(s) satisfy the condition(s). mentioned unde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed to the 1st Respondent for confirmation. 37. From minutes of meeting dated 22nd September 2008, we find that signatures of CMD appears to be different in two sets of minutes. The meeting dated 27th December 2008 also show that one Mr. Arun Bhalla's (Nominee Director of 1st Respondent) name was inserted in the minutes which was supplied to the 1st Respondent even though the said officer had not attended the meeting. Therein also the signatures of CMD appears to be different in two sets of minutes. Similar is the position with regard to of meeting dated 31st March 2009. Apart from the fact that the Signatures of CMD appears to be varying and different, the font size is also different. Agenda No. 4 in the minutes supplied at the contemporaneous time shown as Agenda No. 3 in the minutes supplied subsequently. Agenda No. 8 regarding review project activities is missing in the minutes supplied later on. There are other infirmities which are not required to be highlighted at this stage. 38. The questions arise for determination are: (i) whether the Tribunal was correct in observing that sub-clause (i), clause (b) of Section 213 is wide enough to include contravention of any law, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ld be construed with reference to the context and other clauses of the Act; so as, as far as possible, to make a consistent enactment of the whole statute or series of statutes relating to the subject-matter." It is spoken of construction "ex visceribus actus". "It is the most natural and genuine exposition of a statute", laid down LORD COKE "to construe one part of a statute by another part of the same statute, for that best ex-presseth the meaning of the makers". To ascertain the meaning of a clause in. a statute the court must look at the whole statute, at what precedes and at what succeeds and not merely at the clause itself, and, "the method of construing statutes that I prefer", said LORD GREENE, M.R. "is to read the statute as a whole and ask oneself the question: 'In this state, in this context, relating to this subject matter, what is the true meaning of that word'?" As stated by SINHA, CJ.I.: "The court must ascertain the intention of the Legislature by directing its attention not merely to the clauses to be construed but to the entire statute; it must compare the clause with the other parts of the law, and th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to Section 6(i), but also by a non-prescribed period. Same can never be the legislative intent. 15. Two principles of construction - one relating to casus omissus and the other in regard to reading the statute as a whole appear to be well settled. Under the first principle a casus omissus cannot be supplied by the court except in .the case of clear necessity when reason for it is found in the four corners of the statute itself but at the same time a casus omissus should not be readily inferred and for that purpose au the parts of a statute or section must be construed together and every Clause of a section should be construed with reference to the context and other clauses thereof so that the construction to be put on a particular provision makes a consistent enactment of the whole statute. This would be more so if literal construction of a particular clause leads to manifestly absurd or anomalous results which Could not have been intended by the legislature. An intention to produce an unreasonable result", said Danckwerts L.J., in Artemiou v. Procopiou (at All ER p. 544-1), "is not to be inputed to a statute if there is some other construction available". Where t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in connection therewith been guilty of fraud, misfeasance or other misconduct towards the company or towards any of its members; or (iii) the members of the company have not been given all the information with respect to its affairs which they might reasonably expect, including information relating to the Calculation of the commission payable to a managing or. other director, or the manager; of the company, order, after giving a reasonable opportunity of being heard to the parties concerned, that the affairs of the company ought to be investigated by an inspector or inspectors appointed by the Central Government and where such an order is passed, the Central Government shall appoint one or more competent persons as inspectors to investigate into the affairs of the company in respect of such matters and to report thereupon to it in such manner as the Central Government may direct: Provided that if after investigation it is proved that- (i) the business of the company is being conducted. With intent to defraud its, creditors, members or any other persons or otherwise for a fraudulent or unlawful purpose, or that the company was formed for any fraudulent or unlawful purpose; ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... resulting punishment is that if any-allegation is made by any person before a court of law or Tribunal such person is required to support the allegation by bringing on record some evidence to suggest that a prima facie case is made out and there are good reasons for seeking an order. Therefore, the sentence "Supported by such evidence as may be necessary for the purpose of showing that applicants have good reasons for seeking an order for the conducting an investigation into the affairs of the company", as mentioned below clause (a) of Section 213 is applicable in all cases and the applicant(s), whoever prefers application under Section 213, whether they belong to category as mentioned in clause (a) or clause (b), such evidence is required to be relied upon not only to justify the allegations, but also to Show that there is a good reason for seeking an order, to enable the TribunaI to form its opinion. 49. The other basic principle of justice delivery system that a court or a Tribunal while passing an order is not only required to give good reason based on record/evidence but also required to show that after being satisfied itself the Court/ Tribunal has passed such orde ..... X X X X Extracts X X X X X X X X Extracts X X X X
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