Court rules criminal proceedings cannot be stayed under Companies Act Section 391(6). No FIR means no initiation. EOW notice insufficient for stay.

The court dismissed the application, ruling that criminal proceedings could not be stayed under Section 391(6) of the Companies Act, 1956. It determined that no criminal proceedings had been initiated against the applicant by NSDC, as no FIR had been lodged. The court clarified that the EOW's notice did not constitute a pending civil or criminal proceeding that could be stayed under the Act.

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Issues Involved:
1. Whether Section 391(6) of the Companies Act, 1956 can stay criminal proceedings.
2. Whether the complaint by NSDC to the EOW constitutes a criminal proceeding.
3. Whether any proceedings, civil or criminal, are pending against the applicant.

Issue-wise Detailed Analysis:

1. Whether Section 391(6) of the Companies Act, 1956 can stay criminal proceedings:
The applicant, iYogi Technical Services Pvt. Ltd., sought an interim stay of proceedings under Section 391(6) of the Companies Act, 1956, following a complaint by NSDC to the EOW. The applicant contended that the revival process justified the stay of proceedings. However, NSDC argued that the proceedings were criminal and could not be stayed under Section 391(6), citing the Division Bench judgment in Krishna Texport Industries Ltd v. D.C.M. Ltd, which held that Section 391(6) only applied to civil proceedings. The court reiterated that the object of Section 391(6) was to prevent vexatious litigation during the revival process and did not extend to criminal proceedings. The court concluded that criminal proceedings could not be stayed under Section 391(6) of the Act.

2. Whether the complaint by NSDC to the EOW constitutes a criminal proceeding:
The court examined whether the complaint by NSDC to the EOW and subsequent notices constituted criminal proceedings. The court noted that no FIR had been lodged against the applicant, and the EOW was merely looking into the matter. Referring to Lalita Kumari v. Govt. of UP, the court stated that criminal proceedings commence with the registration of an FIR. Since no FIR had been filed, the court held that criminal proceedings had not been initiated against the applicant.

3. Whether any proceedings, civil or criminal, are pending against the applicant:
The court analyzed whether any proceedings, civil or criminal, were pending against the applicant. The court referred to the definition of "proceeding" in Black’s Law Dictionary and various judgments, which indicated that a proceeding involves judicial or quasi-judicial action. The court found that the EOW's notice to the applicant was not a "show cause notice" and did not propose any prejudicial action. Thus, the court held that no proceedings, civil or criminal, were pending against the applicant that could be stayed under Section 391(6) of the Act.

Conclusion:
The court dismissed the application, concluding that no "proceeding," as could be stayed under Section 391(6) of the Companies Act, 1956, initiated by the NSDC, was presently pending against the applicant. The court emphasized that if the applicant was guilty of criminal misfeasance or misappropriation, it must face the consequences, but if the grievance was purely civil, the EOW should ensure that the revival efforts were not unjustifiably jeopardized.

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