Case Law Details
Exalogic Solutions Private Limited Vs Director (Karnataka High Court)
Karnataka High Court held that during the pendency of proceedings u/s. 210 of the Companies Act, 2013, Serious Fraud Investigation Office (SFIO) can be assigned with the investigation, u/s. 212 of the Companies Act.
Facts- The petitioner, claiming to be a one person company incorporated in the year 2014, is before this Court seeking a direction to call for records and quash order dated 31-01-2024 passed by the 1st respondent/Director, Serious Fraud Investigation Office (‘SFIO’).
The petitioner alleges that during the pendency of proceedings u/s. 210, SFIO could not have been assigned with the investigation, u/s. 212 of the Act.
Conclusion- Held that the submission of the learned senior counsel for the petitioner is that when the proceedings under Section 210 are underway, assignment of investigation to the SFIO cannot take The strength on which the said submission is made is that there should a report under Section 210, as is directed, and only then the investigation can be handed over to the SFIO. The effect of such submission is that handing over of investigation to the SFIO, should precede a final report under Section 210. This submission is sans countenance as it travels on a slippery slope. Section 210 does speak of a report, the report can be either interim or final it need not be the final report only. During an investigation under Section 210, if the Inspectors, out of serendipity come across information that would prima facie touch upon skullduggery and thereon necessity emerges to assign the investigation to a multi-disciplinary body like the SFIO, created under the Act, this Court cannot put shackles on the hands of the Central Government, for such assignment. If it had been entrusted to any other agency outside the Act, it would have been a circumstance altogether different. It is entrusted to the SFIO which is created under the Act, i.e., in terms of Section 211 with elaborate functions under Section 212. The protection to any Company from duplication of proceedings is kept tight under sub-section (2) of Section 212 and above all, and after all, it is investigation.
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