2023 (6) TMI 1059

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....ogation in the course of the investigation. 2. The order dated 17.5.2023 records that the judgment will decide on the maintainability of the writ petition and the two applications filed by the petitioners. 3. On the point of maintainability, learned counsel appearing for the respondent nos. 1 to 6 (SFIO) submits that the petitioners filed a writ petition before the Gujarat High Court for the same relief and that the Single Bench as well as by the Division Bench rejected the case made out by the petitioners. Counsel submits that the present writ petition is barred by the doctrine of constructive res judicata. Counsel places the judgment of the Division Bench of the Gujarat High Court to urge that all the points urged by the petitioners in the present writ petition have attained finality and hence this Court ceases to have jurisdiction to hear the present writ petition on the same cause of action. 4. Learned counsel appearing for the petitioners opposes the contentions on behalf of the SFIO and submits that the writ petition before this Court was filed prior to that of the Gujarat High Court and that the relief claimed in both the proceedings are different. It is submitted that th....

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....ode of Civil Procedure, 1908 which requires that any matter which might and ought to have been made in a former suit shall be deemed to have been a matter directly and substantially an issue in such suit. The word "such" is carried from section 11 and refers to the "subsequent suit". Therefore, the issue is whether the relief claimed in the present writ petition along with the two applications was covered by the writ petition filed in the Gujarat High Court. Since, the writ petition filed in the Calcutta High Court pre-dates the writ petition filed in the Gujarat High Court, the principle urged by the respondents becomes substantially diluted. Even otherwise, the petitioners' challenge to the Division Bench judgment of the Gujarat High Court by way of the SLP also reopens the issues for decision once again. The decision of the Division Bench of the Gujarat High Court would also show that the relief claimed was not identical to the prayers of the present writ petition. 9. Devilal Modi v. Sales Tax Office, Ratlam; AIR 1965 SC 1150 has been cited on the principle of constructive res judicata where it was held that the doctrine is one of public policy. The Supreme Court also found tha....

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....13 which provides for investigation into affairs of a company by the Serious Fraud Investigation Office. 14. Learned counsel appearing for the petitioners submitted in the course of arguments that the only prayer which the petitioners now seek is for the investigation to be completed within a reasonable period of time. It was further submitted that the petitioners are willing to physically appear before the SFIO but subject to reasonable conditions. 15. The prayer for stay of the investigation which is presently being carried on under the provisions of the 2013 Act as well as the prayer for the investigation to be completed within a certain period of time cannot be granted for the following reasons. 16. Section 212 of The Companies Act, 2013 which deals with the investigation into the affairs of a Company by the SFIO under which the investigation against the petitioners are continuing, does not contemplate or provide for a time frame within which the investigation has to be completed . This was also the decision of the Supreme Court in Serious Fraud Investigation Office vs. Rahul Modi; (2019) 5 SCC 266 where the Supreme Court considered whether the period within which a Report i....

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....e principles of equity and natural justice demand that the SFIO should at least indicate a reasonable time frame within which the investigation will be completed. Admittedly, 4 years have passed since SFIO was directed to conclude the investigation within 6 months. Hence, the petitioners would have a reasonable expectation that the investigation will see closure within a reasonable period of time. 20. Needless to say, the SFIO is under a statutory obligation to comply with the checks and safeguards enacted into section 212 including filing of a Report under section 212(3) and of an interim report to the Central Government under section 212(11). 21. Although the petitioners have not pressed the prayer for appearance through video link, it is expected that the SFIO will not harass the petitioners by demanding unnecessary and frequent physical appearances including travelling to a different city unless the petitioners' physical presence is required for the investigation. The SFIO must bear in mind that the investigation has been continuing for a long time. 22. The decisions cited on behalf of the SFIO do not strictly apply to the facts of the present case. In Arnab Ranjan Goswami, ....