TaxTMI 
TaxTMI 
2018 (12) TMI 1857
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.... for short) to investigate the prima-facie allegations which have been referred to in the gist of the report. The learned Single Judge further directed the SFIO to give an opportunity of hearing to both the parties before submitting its report and suggesting the future course of action. 2. Briefly stated, the case of the appellants in LPA 641/2016 is that, the appellant no. 1 Company M/s. Coastal Projects Limited is a company engaged in construction and engineering, procurement and construction services of infrastructure projects like metro rail, canal irrigation etc. The second appellant, Sabbineni Surendra along with his father Late Sabbineni Papaiah (respondent no. 2 in contempt case and died during the pendency of the case) were the promoters of the appellant no. 1 Company. Another appellant, Rajeev Dhingra in LPA 642/2016 was an employee of the appellant no. 1 Company, and held the position of Vice-President (Finance) in the said company until January 2014 where-after he stated to have resigned from the company. 3. On 28.03.2011 the appellant no. 1 Company entered into a Debenture Subscription Agreement with the respondent no. 1 and agreed to issue Compulsory Convertible....
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....o declare them as a 'wilful defaulter', and further on 17.01.2013 issued another letter to other banks and financial institutions including RBI (the lenders of the appellant company) communicating its decision to declare the appellant no. 1 Company as a 'wilful defaulter'. 9. Aggrieved, the appellants filed a writ petition being W.P.(C) No. 393/2013 against the respondent no. 1 seeking to quash the aforesaid letters. Vide order dated 24.01.2013, the writ petition was disposed of with the consent of the parties in accordance with the terms of the settlement entered into between them whereby the appellants made a solemn promise to pay Rs. 100 crores to the respondent no. 1 in three installments in the following manner: "(i) The first installment of Rs. 10 Crores will be paid by the petitioner to the respondent on or before 15.03.2013; (ii) The second installment of Rs. 15 Crores will be paid by the petitioner to the respondent on or before 20.04.2013; (iii) The third installment of Rs. 75 Crores will be paid by the petitioner to the respondent on or before 30.06.2013." 10. Upon the appellants undertaking to pay the aforesaid installmen....
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....he respondent no. 1 is full of errors on the face of the record, and this aspect was brought to the notice of the learned Single Judge and the same has also been recorded in the impugned order, but nevertheless the learned Single Judge proceeded in a summary manner and passed a direction ordering the SFIO investigation. 20. The Constitution as well as the Criminal Procedure Code and other enactments have construed certain rights and duties and also the obligations that even an ordinary citizen has to inform the concerned authorities regarding a crime or the violation committed by any individual or body corporate, etc. The directions contained in the impugned order are nothing but a request and communication to the SFIO to initiate the action against the appellants, certainly, as per law and following the due process provided under the Act and the Rules there-under. 21. The Courts while exercising the powers under Article 226 or Article 32 of the Constitution of India or any other enactment or if it comes to the knowledge of the Court that there is breach, violation or crime committed by any individual or body corporate or legal entity, are fully empowered to communicate and/o....
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....der dated 10.1.2005 Having heard learned Counsel for the parties, we are of the considered view that a detailed examination is necessary as to which version of Zahira Habibullah Sheikh is a truthful version. It is necessary to do so because various documents have been placed to show that she had made departure from her statements/stands at different points of time. Allegations are made by Mr. P.N. Lekhi, learned senior counsel appearing for Zahira Habibullah Sheikh that she was being threatened, coerced, induced and/or lured by Teesta Setalvad. On the contrary, learned Counsel appearing for Teesta Setalvad submits that she was being threatened, coerced, lured or induced by others to make statements or adopt stands contrary to what she had stated/adopted earlier. In this delicate situation, the appropriate course would be to direct an inquiry to be conducted to arrive at the truth. We direct the Registrar General of this Court to conduct the inquiry and submit a report to this Court within three months. The Registrar General shall indicate in the report (a) if Zahira Habibullah Sheikh was in any-manner threatened, coerced, induced and/or in any manner pressurised to depose/....
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....or 'de novo' and even 'reinvestigation'. 'Fresh', 'de novo', and 'reinvestigation' are synonymous expressions and their result in law would be the same. The superior courts are even vested with the power of transferring investigation from one agency to another, provided the ends of justice so demand such action. of course, it is also a settled principle that this power has to be exercised by the superior courts very sparingly and with great circumspection." 24. Further, in Dharam Pal vs. State of Haryana and Ors., 2016 (2) ACR 1440, it was held by the Supreme Court as under: "20. Be it noted here that the constitutional courts can direct for further investigation or investigation by some other investigating agency. The purpose is, there has to be a fair investigation and a fair trial. The fair trial may be quite difficult unless there is a fair investigation. We are absolutely conscious that direction for further investigation by another agency has to be very sparingly issued but the facts depicted in this case compel us to exercise the said power. We are disposed to think that purpose of justice commands that the cause of the vic....
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....he SFIO shall certainly submit the report and shall suggest the future course of action after giving an opportunity of hearing to both the parties. 27. This is not an order of punishment per se but a communication by the Court that certain facts have come to light which were required to be communicated to the SFIO for them to decide whether they should examine the case within the powers conferred by the statute upon them. 28. Order of the Single Judge is not to be considered as an order of mandamus and direction to SFIO to conduct an inquiry without procedure prescribed by law. The SFIO is to act as per and within the framework of law. If any precondition or requirements are to be satisfied under the statute before investigation can be undertaken, the authority shall be bound to undertake the said steps and satisfy itself whether or not facts justify investigation and inquiry. In such circumstances, it would be the satisfaction of the authorities on due application of mind which would confer jurisdiction. We clarify that the impugned order does not substitute and does not bind the SFIO to record their satisfaction, one way or the other. 29. The observation and communicatio....
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....ction 210, where the Central Government is of the opinion, that it is necessary to investigate into the affairs of a company by the Serious Fraud Investigation Office-- (a) on receipt of a report of the Registrar or inspector under section 208; (b) on intimation of a special resolution passed by a company that its affairs are required to be investigated; (c) in the public interest; or (d) on request from any Department of the Central Government or a State Government, the Central Government may, by order, assign the investigation into the affairs of the said company to the Serious Fraud Investigation Office and its Director, may designate such number of inspectors, as he may consider necessary for the purpose of such investigation. (2) Where any case has been assigned by the Central Government to the Serious Fraud Investigation Office for investigation under this Act, no other investigating agency of Central Government or any State Government shall proceed with investigation in such case in respect of any offence under this Act and in case any such investigation has already been initiated, it shall not be proceeded further with and the co....
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....ce; or (ii) any officer of the Central Government authorised, by a general or special order in writing in this behalf by that Government. (7) The limitation on granting of bail specified in subsection (6) is in addition to the limitations under the Code of Criminal Procedure, 1973 or any other law for the time being in force on granting of bail. (8) If the Director, Additional Director or Assistant Director of Serious Fraud Investigation Office authorised in this behalf by the Central Government by general or special order, has on the basis of material in his possession reason to believe (the reason for such belief to be recorded in writing) that any person has been guilty of any offence punishable under sections referred to in sub-section (6), he may arrest such person and shall, as soon as may be, inform him of the grounds for such arrest. (9) The Director, Additional Director or Assistant Director of Serious Fraud Investigation Office shall, immediately after arrest of such person under subsection (8), forward a copy of the order, along with the material in his possession, referred to in that subsection, to the Serious Fraud Investigation Office in a s....
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....ailable with it to the Serious Fraud Investigation Office; (b) The Serious Fraud Investigation Office shall share any information or documents available with it, with any investigating agency, State Government, police authority or income tax authorities, which may be relevant or useful for such investigating agency, State Government, police authority or income-tax authorities in respect of any offence or matter being investigated or examined by it under any other law." 31. As per Section 211, the Central Government has the power to direct the investigation by the SFIO. This is further clear from Section 212(1) which states that the investigation by the SFIO is conducted at the instance of the Central Government. The investigation is conducted where the Central Government is of the opinion that it is necessary to conduct an investigation into the affairs of the company and it also specifically enlists the cases under which such investigation can be ordered. 32. Upon completion of the investigation by the officers of SFIO, the report also has to be submitted to the Central Government. 33. The Court has the power while dealing with the matter under the Contempt of Co....