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Issues: (i) whether the Delhi Special Police Establishment could investigate the alleged offences in Tamil Nadu on the basis of the State's consent, and (ii) whether a police report based on inspection of company records under section 209 of the Companies Act, 1956 was barred because prosecution had to follow only an investigation under sections 235 to 242 of that Act, or because such course involved discrimination under article 14.
Issue (i): whether the Delhi Special Police Establishment could investigate the alleged offences in Tamil Nadu on the basis of the State's consent.
Analysis: The statutory scheme under sections 5 and 6 of the Delhi Special Police Establishment Act, 1946 permitted extension of the Establishment's powers to a State only with that State's consent. The record showed a letter of consent from the then Madras Government and affidavits confirming that sanction had been granted at the proper level and approved by the Chief Minister. In the absence of material rebutting the regularity of official acts, the consent was treated as valid and effective for the notified offences.
Conclusion: The challenge to the Special Police Establishment's jurisdiction failed; the investigation in Tamil Nadu was held to be authorised.
Issue (ii): whether a police report based on inspection of company records under section 209 of the Companies Act, 1956 was barred because prosecution had to follow only an investigation under sections 235 to 242 of that Act, or because such course involved discrimination under article 14.
Analysis: Inspection of books under section 209 was held to be distinct from an investigation into the affairs of a company under sections 235 and 237. The Court held that sections 241 and 242 applied where a formal investigation had been ordered and a report submitted under that scheme, but they did not create an exclusive method for setting criminal law in motion against individuals suspected of offences against company property. A cognizable offence could be reported to the police and investigated under the Code of Criminal Procedure, and no statutory bar required prior resort to the company-law investigation machinery. The difference between the two procedures did not amount to hostile discrimination, and article 14 was not attracted.
Conclusion: The objection to the police registration and investigation was rejected, and no violation of article 14 was made out.
Final Conclusion: The petition was held to be without merit and was dismissed, with the impugned police action and related challenge left undisturbed.
Ratio Decidendi: Inspection of company books under section 209 of the Companies Act, 1956 is not the same as an investigation into the affairs of a company under sections 235 to 242, and the latter is not the exclusive statutory route for reporting or investigating cognizable offences against company assets.
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