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Generate professional replies, appeals, opinions to Show Cause Notices, assessment orders, audit objections, and other legal communications using TaxTMI's AI Drafter.
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AI Drafter - (New and Powerful) ✕ Generate professional replies, appeals, opinions to Show Cause Notices, assessment orders, audit objections, and other legal communications using TaxTMI's AI Drafter.
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Issues: Whether the FIR and the criminal investigation could be quashed under Section 482 on the ground that alleged acts of a company employee concerning misappropriation, forgery, falsification of accounts and cheating had to be investigated only by the Serious Fraud Investigation Office under the Companies Act, 2013.
Analysis: The allegations were against an employee in her individual capacity and disclosed cognizable offences under the Indian Penal Code. The statutory scheme of Sections 210, 211 and 212 of the Companies Act, 2013 concerns investigation into the affairs of a company and the special mechanism of SFIO when the Central Government assigns such investigation. Section 212(2) restrains other agencies only in respect of a case assigned to SFIO for offences under the Act. The materials did not show that the present allegations were confined to fraud under the Companies Act or that the CID's investigation was barred. The inherent power under Section 482 CrPC was held to be exceptional and not warranted in the facts.
Conclusion: The challenge to CID investigation failed and the petition for quashing was rejected.
Ratio Decidendi: Where allegations against a company employee disclose cognizable offences under the Penal Code in her personal capacity, Section 212(2) of the Companies Act, 2013 does not oust police investigation, and the SFIO mechanism is confined to investigations into the affairs of a company and offences under the Act.
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