AI Drafter 
TaxTMI 
TaxTMI 
2024 (6) TMI 1042
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....le forthwith and heard. 2. At the outset, Mr. Singh is seeking an adjournment, which we are not inclined to grant. This petition has been pending since 2018. 3. Petition has been filed impugning an order dated 4th October 2018 passed under Section 206 (4) of the Companies Act 2013 (the Act). By the said order, petitioner has been called upon to furnish various details, documents and information. 4. It is petitioner's case that before order under Section 206 (4) of the Act is passed, respondent no. 1 has to first comply with the proceedings under sub-sections (1) and (3) of Section 206 of the Act. It is also petitioner's case that even to pass an order under Section 206 (4) of the Act, respondent no. 1 could only issue the impugned ....
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....he Act reads as under: 206. Power to call for information, inspect books and conduct inquiries- (1) Where on a scrutiny of any document filed by a company or on any information received by him, the Registrar is of the opinion that any further information or explanation or any further documents relating to the company is necessary, he may by a written notice require the company- (a) to furnish in writing such information or explanation; or (b) to produce such documents, within such reasonable time, as may be specified in the notice. (2) On the receipt of a notice under sub-section (1), it shall be the duty of the company and of its officers concerned to furnish such information or explanatio....
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....ness of a company is being carried on for a fraudulent or unlawful purpose or not in compliance with the provisions of this Act or if the grievances of investors are not being addressed, the Registrar may, after informing the company of the allegations made against it by a written order, call on the company to furnish in writing any information or explanation on matters specified in the order within such time as he may specify therein and carry out such inquiry as he deems fit after providing the company a reasonable opportunity of being heard: Provided that the Central Government may, if it is satisfied that the circumstances so warrant, direct the Registrar or an inspector appointed by it for the purpose to carry out the inquiry ....
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....quire the company, (a) to furnish in writing such information or explanation; or (b) to produce such documents, within such reasonable time, as may be specified in the notice. Therefore, the Registrar has to form, after the scrutiny of any document filed by petitioner or on any information received by the Registrar, that any information or explanation or further documents relating to the companies is necessary, he may by a written notice require the company to furnish in writing such information or explanation or to produce such documents. There is nothing to indicate from the impugned order that the Registrar receiving any information or that he had scrutinized any document filed by petitioner and had formed an opinion that he needs furthe....
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....liance with the provisions of this Act or if the grievances of investors have not being addressed, the Registrar may, after informing the company of the allegations made against it by a written order, call on the company to furnish in writing any information or explanation on matters specified in the order within such time as he may specify therein and carry out such inquiry as he deems fit. 12. Even if, the Registrar proceeded on the basis that sub-section (4) of Section 206 of the Act is independent of sub-sections 1 to 3 of Section 206 of the Act, still the impugned order does not satisfy the requirements of sub-section (4) of Section 206 of the Act. In the impugned order, there is a general statement "In exercise of the powers confer....
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....no. 1 cannot be initiated. Therefore, even on this count the impugned order is ex-facie bad in law and without application of mind. 15. The impugned order under Section 206 (4) of the Act should make out a prima facie case as to the information called for, and how the same relates to the business of a Company being carried on for fraudulent and unlawful purpose. In the impugned order, the said linkage is totally absent. In the impugned order, there is no finding even prima facie of the petitioner's business being conducted fraudulently or unlawful purpose or in defiance of the provisions of the Act, etc. On the contrary in the affidavit in reply it is stated in the impugned notice respondent no. 1 is not alleging or establishing any frau....