SFIO investigation assignment requires recorded public-interest reasons and relevant material; unreasoned investigations and prosecutions cannot stand.
Section 212(1)(c) requires an opinion, founded on cogent and relevant objective material, that an SFIO investigation is necessary in the public interest. Although the satisfaction is subjective, the assignment order must itself disclose the relevant circumstances, independent application of mind, and reasons for both investigation and SFIO assignment; it remains subject to judicial review. An order merely reciting statutory power, without demonstrable reasons, cannot be cured by later minutes, affidavits, or investigation reports, and invalidates consequential proceedings. Earlier dismissal of a co-accused's writ petition as premature, without merits adjudication, does not create res judicata against pending petitions.
Issues: (i) Whether the petitions were maintainable despite the earlier dismissal of a co-accused's writ petition; (ii) Whether the order assigning the company's investigation to the SFIO under Section 212(1)(c) of the Companies Act, 2013 was legally sustainable, and the effect on consequential proceedings.
Issue (i): Whether the petitions were maintainable despite the earlier dismissal of a co-accused's writ petition.
Analysis: The earlier writ petition had been dismissed as premature, without adjudication on merits, and with liberty to avail remedies at the appropriate stage. The present petitions had already been instituted and were protected by an interim order. The earlier dismissal therefore did not attract res judicata or bar scrutiny after the investigation report and prosecution complaint had been filed.
Conclusion: The petitions were maintainable, in favour of the petitioners.
Issue (ii): Whether the order assigning the company's investigation to the SFIO under Section 212(1)(c) of the Companies Act, 2013 was legally sustainable, and the effect on consequential proceedings.
Analysis: Section 212(1)(c) of the Companies Act, 2013 requires formation of an opinion that investigation by the SFIO is necessary in public interest. Though the formation of opinion involves subjective satisfaction, it must rest on objective consideration of cogent and relevant material. The relevant circumstances, application of mind, and reasons warranting both investigation and assignment to the SFIO must be demonstrable from a speaking, reasoned order and remain subject to judicial review.
Analysis: The assignment order merely reproduced the statutory power and disclosed neither the material considered nor reasons establishing the necessity for an SFIO investigation. The statutory inspection and supplementary reports under Sections 206(5) and 208 of the Companies Act, 2013 disclosed only compoundable regulatory irregularities and did not find fraud, diversion, siphoning, defalcation, or misappropriation of funds. The additional material noted in the Oversight Committee minutes, including complaints, a bank monitoring report, a parliamentary communication, and a media report, did not independently furnish a relevant and sufficient basis for the statutory opinion. Subsequent minutes, affidavits, or investigation reports could not cure the defect through supplementation of reasons.
Conclusion: The assignment order was invalid for non-application of mind and absence of demonstrable relevant circumstances; the order and all proceedings consequential to it were quashed, in favour of the petitioners.
Final Conclusion: The SFIO investigation and prosecution lacked a valid statutory foundation because the mandatory jurisdictional conditions for invoking Section 212(1)(c) of the Companies Act, 2013 were not satisfied.
Ratio Decidendi: An SFIO investigation under Section 212(1)(c) of the Companies Act, 2013 is valid only where the assignment order itself discloses demonstrable relevant circumstances, independent application of mind, and reasons establishing the necessity of investigation by the SFIO; subsequent material cannot validate an unreasoned foundational order.