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TMI Blog2021 (12) TMI 1379X X X X Extracts X X X X X X X X Extracts X X X X ..... ocates. ORDER APPL.44118/2021 (exemption) Allowed, subject to all just exceptions. Application is disposed of. W.P.(C) 13984/2021 & CM APPL.44117/2021 (stay) 1. Issue notice. 2. Mr. Anurag Ahluwalia, learned Central Government Standing Counsel accepts notice on behalf of the Respondents and seeks time to file counter affidavit. 3. Time as prayed for is granted. 4. Let counter affidavit be filed, within three weeks from today. Rejoinder thereto, if any, be filed within one week thereafter. 5. At the outset, learned Additional Solicitor General appearing on behalf of the Respondents raises a preliminary objection to the maintainability of the present petition on the ground that a writ petition seeking similar reliefs, more particu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of more than three years, the investigation is still ongoing. Section 212(3) of the Companies Act stipulates that where the investigation into the affairs of a Company has been assigned by the Central Government to SFIO, it shall submit its report to the Central Government within such period as may be specified in the order, which in the present case was three months, in the order dated 31.10.2018. Thus, there is a clear violation of statutory mandate in the present case by Respondents No.3 and 4 in continuing the investigation after lapse of the period of three months commencing from 31.10.2018. (iii) Perusal of the order dated 27.10.2020 reveals that no reason has been assigned in the said order as to why it was considered necessary tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s under investigation, pursuant to order dated 31.10.2018. Petitioners have clearly averred in para 26 of the writ petition that the six Companies, have never been, at any relevant time, the Subsidiary Companies or the Holding Companies of the three Companies already under investigation. It is also categorically denied by the Petitioners that these six companies were ever managed by any person as Managing Director/Manager, who is or was, at the relevant time, the Managing Director/Manager of any of the three Companies under investigation. It is further denied that the Board of Directors of any of the said six Companies are or were comprised of nominees of any of the three Companies, whose affairs are being investigated into, pursuant to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Companies Act, 2013, only, the Securities and Exchange Board of India ('SEBI') has power to investigate and no other Authority, much less the Respondents have any power to investigate. On this ground also, operation of the impugned orders deserves to be stayed. Reliance is placed on the judgment of the Hon'ble Supreme Court reported in Sahara India Real Estate Corpn. Ltd. v. SEBI, (2013) 1 SCC 1, especially paras 309, 310 and 326.4 onwards, for the proposition that only SEBI could have conducted the investigation, if at all, and the investigation sought to be conducted by SFIO against the Petitioners is wholly illegal and without jurisdiction. (viii) It is a settled law that statements made before Investigating Officers are not admissi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... igation and submitting a report to the Central Government, which is evident from reading para 4 of the order dated 31.10.2018 (Annexure P-1). There was thus a clear mandate by the Central Government to complete the investigation within three months from the date of the issue of the order i.e. 31.10.2018. However, the investigation was not completed within the stipulated time and as asserted by the Petitioners, the same is still ongoing. Prima facie, there is violation of Section 212(3) and the direction of the Central Government. (ii) So far as investigation into the affairs of the six Companies by virtue of impugned order dated 27.10.2020 (Annexure P-2 to the memo of this writ petition) is concerned, which includes Petitioners No.2 and 3 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rnment is required to look into the facts and circumstances that emanate out of a report of the Registrar or Inspection furnished under Section 208 of the Companies Act, 2013 and then form a subjective opinion based on objective considerations. In our prima facie view nothing is discernible from the impugned orders as to what cogent material led to the formation of opinion by the Central Government that the affairs of the Petitioners were required to be investigated. (iv) In so far as the preliminary objection, raised by the learned ASG is concerned, suffice would it be to note for the present, that the Petitioners before the Lucknow Bench of the Allahabad High Court as well as in the writ petition before the learned Single Judge of this ..... X X X X Extracts X X X X X X X X Extracts X X X X
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