2022 (5) TMI 1631

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....petition is filed seeking to quash the order dated 17.08.2018 passed by the respondent No.1 under Section 212 (1) (c) of the Companies Act, 2013 for investigation into the affairs of Educomp Solutions Limited (hereinafter referred as ESL) through Serious Fraud Investigation Office (SFIO)/respondent No.2 and to set aside the investigations as being passed in public interest though no public interest is involved in this case and the impugned order is a result of a private corporate rivalry. 4. The learned senior counsel for the petitioner submits the impugned order is violative of natural justice and it was passed on the basis of the complaint made by Raffles Group. A bare perusal of the final report filed by the EOW would show the complaint....

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....onducting any preliminary inquiry and without following the procedure established by law in regard to the alleged bank fraud cases and moreover, in the instant case, the petitioner had joined the company as a director on 13.11.2013 and all the loan facilities as per the FIR were prior to the petitioner joining the ESL as one of the Director and the only facility pursuant to his Directorship are under the CDR in which no fraud is alleged. Therefore, in these circumstances, the respondent (CBI) is directed to file a detailed reply/status report mentioning about the outcome of the two previous complaints dated 27.03.2019 and 23.05.2019 and as to whether complicity of any public servant was found during the previous two investigations. 23. L....

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....e, but the existence of circumstances relevant to the inference as to the sine qua non for action must be demonstrable. It is not reasonable to hold that the clause permits the Government to say that it has formed an opinion on circumstances which it thinks exist. Since existence of circumstances is a condition fundamental to the making of the opinion, when questioned the existence of these circumstances have to be proved at least prima facie. 48. We do not think that there were materials in the present case and which can be termed as enough to warrant the exercise of power by the Central Government by resorting to section 212(1) of the Act of 2013. The Central Government, in the order under challenge, did not spell out any circumstances....

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....ed diversion of raw materials. There has been absolutely no details furnished nor referred in the report. Rather, the report proceeds on the basis that as far as these issues are concerned nothing can be done by the Ministry of Corporate Affairs or the Registrar of Companies. We fail to understand, therefore, how in the present facts and circumstances and based on allegations and counter allegations between two groups of shareholders can it be even held that it is necessary in public interest to direct an investigation into the affairs of the company. Once we reach the conclusion that there is lack of requisite material to arrive at the requisite opinion or record the necessary satisfaction, then, in exercise of our powers of judicial revie....