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TMI Blog2023 (5) TMI 396X X X X Extracts X X X X X X X X Extracts X X X X ..... ernment may at the expense of the Company appoint a person to inquire into and report to the Central Government for sanctioning any payment of interest on so much of that share capital as is for the time being paid up, for the period and subject to the conditions and restrictions. But under Section 212 of the Act, it is stated that the investigation into affairs of the Company should be done by SFIO, whenever the Central Government is of the opinion without prejudice to the provisions of Section 212, it is necessary to investigate into the affairs of the Company by SFIO. But in both the cases, action will be taken on the report of the Registrar / Inspector. The petitioners without opting to abide the summons issued under Section 212(4), continues to claim that the correct provision applicable to their case is old Section 235 which is equivalent to Section 210 of the new Act. Such technicalities need not be adverted into at this stage of the proceedings. Since the petitioners have been called upon to give statement in view of the further investigation that has been ordered by the Central Government, it will be appreciable if they could cooperate with the investigation. However, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ereinafter referred to as 'SFIO'] has given statutory status under Section 211 of the Companies Act, 2013 [hereinafter referred to as Act ]; prior to Act 2013, SFIO was functioning as an office under the first respondent with no statutory authority; in respect of SFIO, an order of investigation under Section 235 of the Act 1956 was passed on 17.10.2012 by the first respondent and the same was stayed until the order for winding up of the company has become final; when the proceedings were pending, the company was represented by the Official Liquidator and investigation had taken place and based on the complaint of the prosecution a case is pending on the file of the Special Court in E.O.C.C.No.2/2018 against various accused including the petitioner; the proceedings were stayed by this Court in various Criminal Original Petitions filed by the persons set out as accused therein. 2.1. The petitioner was receiving summons from the third respondent from the year 2018 for a supplementary investigation said to have been ordered on 05.05.2017 and 23.11.2017 under Section 212 of the Act 2013; those summons were served upon the petitioner and he was not in receipt of the orders ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1956 into the affairs of STSL by SFIO and designated officers of SFIO as Inspectors to carry out the investigation. 4. The above order of investigation was challenged by STSL in W.P.No.18813 of 2010 before this Court. In the said Writ Petition, directions have been issued to MCA to pass fresh orders under Section 234(1) and (7) of the Act 1956 separately. In compliance of the said directions, MCA vide Letter No.1/81/10-CL.II dated 03.03.2011 withdrew the investigation order dated 23.07.2010 and ROC Chennai issued fresh notices under Section 234 (1) and (7) of the Act 1956. 5. When the ROC Chennai submitted a report dated 17.02.2012 under Section 234(6) r/w Section 234(1) of the Act 1956 to MCA through the Regional Director (SR) Chennai and the Regional Director (SR) Chennai vide letter dated 24.04.2012 forwarded the report of ROC Chennai to MCA recommending for investigation by SFIO into the affairs of STSL. MCA vide Order of No.4/88/2011-CL-II dated 17.10.2012 ordered for investigation under Section 235 of the Act 1956. 6. Once again STSL filed a Writ Petition in W.P.No.4651 of 2013 against the order dated 17.10.2012 and got an order of stay. However, the stay was v ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dated 03.11.2017 and the complaint is taken on file in C.C.No.2 of 2018. 9. Mr.ARL.Sundaresan, learned Additional Solicitor of India submitted that during the course of investigation, SFIO had obtained permission under Section 240(1-A) of the Act from the Competent Authority vide F.No.SFIO/permission/2012/5556 dated 17.12.2012 in respect of 68 entities with which STSL had various transactions; the details of such entities and the permission obtained under Section 240 (1-A) of the Act 1956 was also mentioned in the investigation report dated 31.03.2017 under para 2.3 of Chapter-II of the investigation report. 9.1. MCA had addressed a letter in F.No.5/8/2017-CL-II dated 05.05.2017 to the Director of SFIO with reference to the investigation into the affairs of STSL and instructed SFIO to submit supplementary investigation report on certain issues; MCA has also sent another letter dated 23.11.2017 in F.No.5/8/2017-CL-II to the Director SFIO to convey the instructions of the Ministry for necessary action; the Director of SFIO vide its order dated 10.07.2018 in F.No.SFIO/INV/AOI/2017-18 had reconstituted the investigation team by appointing the third respondent and two other o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aid provision it is submitted by the learned Additional Solicitor of India that the petitioners objection for passing orders for investigation under Section 212 of the Act 2013 is baseless. 11 . The SFIO has been established by the Central Government (Ministry of Corporate Affairs) in accordance with the Resolution No.45011/16/2003-Admn-I dated 02.07.2003 and it has also been accorded with statutory recognition under Section 211 of the Act 2013. Letters of the first respondent dated 05.05.2017 and 23.11.2017 to the second respondent, order of the second respondent dated 10.07.2018 appointing the third respondent and others as Inspectors under Section 212(1) of the Act 2013 are in accordance with law and they are inter communications between the respondents 1 and 2. 12. By raising the very same claim for the copies of the above communications, one Rajender Kumar has filed W.P.No.444 of 2020 by an order dated 05.03.2020 and that was dismissed on the ground that both the communications are nothing but inter communications between the Ministry of Corporate Affairs and Serious Fraud Investigation Office and the Investigation Officer for appointing the Investigation Officer to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... force during the year 2010. The corresponding provision that was incorporated in the new Act for Section 235 of the old Act is Section 210. Section 210 of the Act speaks about the investigation into the affairs of the Company on receipt of the report from the Registrar / Inspector under Section 208 of the Act. Section 208 of the old Act states that the Central Government may at the expense of the Company appoint a person to inquire into and report to the Central Government for sanctioning any payment of interest on so much of that share capital as is for the time being paid up, for the period and subject to the conditions and restrictions. But under Section 212 of the Act, it is stated that the investigation into affairs of the Company should be done by SFIO, whenever the Central Government is of the opinion without prejudice to the provisions of Section 212, it is necessary to investigate into the affairs of the Company by SFIO. But in both the cases, action will be taken on the report of the Registrar / Inspector. 18 . Section 212(2) of the Act states that if any case is assigned by the Central Government to SFIO, no other agency shall proceed with the investigation. However, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pectors by the then Central Government shall exercise all powers of the Companies Act, 1956 with regard to investigating the affairs of the Companies. Therefore, the officers of SFIO appointed as Inspectors by the Central Government shall have all powers similar to their statutory powers of the Inspectors calling for the records of the Company, investigation, summoning and enforcing attendance. 21. The learned counsel for the petitioners submitted that the petitioners' absence before the third respondent was not wanton, but they were repeatedly requesting the third respondent to furnish copies of certain orders relating to the case and that was not given. 22. Before adverting to find out which of the provisions of the Company law is applicable to the case of the petitioners, nothing will bar the petitioners to go and appear before the third respondent and answer his summons. The constant submission made by the learned counsel for the petitioners is that even when the petitioners received the first summon, they were in the mood to attend the proceedings, but the third respondent did not provide the relevant materials and their request to furnish the copies also turned ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ered. After all they are informations need to be given to the petitioners at any time during the proceedings. If the informations are furnished, no harm will be caused to the proceedings of the Central Government which directed the SFIO to conduct further investigation. 27 . The communication dated 10.07.2018 is the appointment of the third respondent as the Inspector for conducting investigation and that can at best be an inter-departmental communication and the petitioners cannot have any interest, except to know who is the Inspector. But the petitioners cannot stretch the days on the pretext that it is not possible for them to appear before the third respondent, as they have not been furnished with the copies of some proceedings. 28. As stated already, the petitioners firmly believe that the action has to be taken only in accordance with Section 210 of the new Act which corresponds to the Section 235 of the old Act and not under Section 212 of the New Act, it is always open to them to appear before the third respondent in compliance of the summons issued to them without prejudice to their above contention. 29. With the above observations, the Criminal Original Peti ..... X X X X Extracts X X X X X X X X Extracts X X X X
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