Writ jurisdiction unavailable for disputed corporate transfer where statutory company-law remedies and constructive res judicata applied.

Disputed corporate facts and the availability of remedies under the Companies Act, 1956 meant writ relief under Article 226 was unavailable, especially where the same controversy had already been rejected and constructive res judicata applied. The Court held that the petitioner could not reopen the matter by adding new parties and should pursue the statutory company-law remedies instead. On the FERA point, the alleged transfer concerned a foreign company and non-resident transaction, with no reliable material showing a transfer in the company records or a proven transfer of interest in a business in India. Section 26(4) of the Foreign Exchange Regulation Act, 1973 was therefore not shown to be attracted on the pleaded facts.

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Issues: (i) Whether the writ petition was maintainable under Article 226 of the Constitution of India in view of the alternative remedies available under the Companies Act, 1956 and the earlier adjudication of the same controversy; (ii) Whether the alleged transfer of ownership of a foreign subsidiary holding Indian shares amounted to a transfer of interest in a business in India so as to attract section 26(4) of the Foreign Exchange Regulation Act, 1973.

Issue (i): Whether the writ petition was maintainable under Article 226 of the Constitution of India in view of the alternative remedies available under the Companies Act, 1956 and the earlier adjudication of the same controversy.

Analysis: The relief sought was based on disputed allegations requiring factual investigation into the nature of the transaction and the state of the company records. The Court noted that the Companies Act, 1956 provided remedies through the Registrar of Companies and investigation of company affairs and ownership. It also relied on the fact that the same controversy had earlier been considered and rejected, and held that the petitioner could not reopen the matter by adding new parties. The principle of constructive res judicata was also applied.

Conclusion: The writ petition was not maintainable and the petitioner was left to pursue the statutory remedies.

Issue (ii): Whether the alleged transfer of ownership of a foreign subsidiary holding Indian shares amounted to a transfer of interest in a business in India so as to attract section 26(4) of the Foreign Exchange Regulation Act, 1973.

Analysis: The Court held that the alleged transaction was, at best, a transfer between non-residents concerning a foreign company holding shares, and not a proven transfer of interest in a business in India. It further observed that no reliable material showed that the shares had been transferred in the company records, and that section 26(4) was not attracted on the facts alleged. The absence of a confirmed transfer and the availability of the company-law framework reinforced the refusal to grant declaratory relief in writ jurisdiction.

Conclusion: Section 26(4) of the Foreign Exchange Regulation Act, 1973 was not shown to be violated on the pleaded facts.

Final Conclusion: The Court declined to exercise writ jurisdiction over a disputed corporate transaction, treated the matter as one governed by available statutory remedies and prior adverse findings, and declined declaratory relief.

Ratio Decidendi: Where the alleged violation turns on disputed corporate facts and the statute provides adequate remedies, writ jurisdiction will not be used to compel investigation or grant declaration, especially when the issue has already been decided against the petitioner.

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