https://www.taxtmi.com/caselaws?id=99789 Section 237(b) of the Companies Act, 1956 permits investigation only where materials disclose circumstances reasonably suggesting fraud, misfeasance or misconduct; it does not authorise a fishing inquiry on vague suspicion. The court may test whether the statutory condition precedent is actually made out before the opinion to investigate is formed. The transactions relied upon, viewed individually and cumulatively, were found insufficient to show dishonesty, breach of trust or an intention to cause pecuniary loss. Commercial imprudence or debatable business judgment alone does not satisfy the threshold for invoking this drastic power. Accordingly, the investigation order was held unjustified on the materials presented. en-us Wed, 26 Apr 1978 00:00:00 +0530 Mon, 30 Jan 2012 11:31:15 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=99789 Section 237(b) of the Companies Act, 1956 permits investigation only where materials disclose circumstances reasonably suggesting fraud, misfeasance or misconduct; it does not authorise a fishing inquiry on vague suspicion. The court may test whether the statutory condition precedent is actually made out before the opinion to investigate is formed. The transactions relied upon, viewed individually and cumulatively, were found insufficient to show dishonesty, breach of trust or an intention to cause pecuniary loss. Commercial imprudence or debatable business judgment alone does not satisfy the threshold for invoking this drastic power. Accordingly, the investigation order was held unjustified on the materials presented. Case-Laws Companies Law Wed, 26 Apr 1978 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=99789