Validity of an investigation order under the Companies Act was tested against the requirement that executive power to order investigations be supported by disclosed reasons and relevant material. The inspection report recorded only minor violations and made no recommendation for investigation; the Ministry relied on a later Regional Director proposal that was not disclosed. Applying the principle that administrative orders must state and be supported by material reasons when exercised in public interest, the court found the notice initiating investigation lacked substance and quashed the notice, allowing the writ petition.
Validity of an investigation order under the Companies Act was tested against the requirement that executive power to order investigations be supported by disclosed reasons and relevant material. The inspection report recorded only minor violations and made no recommendation for investigation; the Ministry relied on a later Regional Director proposal that was not disclosed. Applying the principle that administrative orders must state and be supported by material reasons when exercised in public interest, the court found the notice initiating investigation lacked substance and quashed the notice, allowing the writ petition.
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