Home Case Index All Cases Companies Law Companies Law + HC Companies Law - 2005 (3) TMI HC This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2005 (3) TMI 472 - HIGH COURT OF DELHISeeking to quash FIR - Investigation of affairs of a company - allotment of shares - Whether recourse to investigation in the affairs of company under sections 235 to 242 of the Companies Act, 1956 (‘the Act’) is the only way to launch prosecution in respect of alleged/suspected commission of cognizable offences under the Indian Penal Code (‘IPC’) by the office bearers of the company or the police can investigate such allegations of its own or under orders of Court, if approached by the aggrieved person/shareholder - HELD THAT:- The FIR has already been registered and the investigation/prosecution has already been launched. The nature and scope of investigation to be conducted under sections 235 to 242 is vastly different from the nature and scope of the investigation to be conducted by the police. An investigation under sections 235 to 242 is not an investigation of a criminal case. The purpose of investigation under the provisions of the Companies Act is only to streamline the working of the company. Such investigations may reveal violation of rules and regulations by the office bearers or even commission of technical offences, which are punishable under the Act for which investigation under the Cr.PC may be uncalled for. But if such investigations reveal the commission of offences under IPC. Section 242 enacts an enabling provision under which the Government can also launch prosecution M. Vaidyanathan v. Sub Divisional Magistrate [1956 (10) TMI 21 - HIGH COURT OF MADRAS] and Indian Express (Madura) (P.) Ltd. v. Chief Presidency Magistrate [1973 (3) TMI 79 - HIGH COURT OF MADRAS]. On the other hand, an investigation by the police officer is launched on receipt of an information of the commission of a cognizable offence. Under section 157 of Cr.PC, it is obligatory on the part of police officer to launch investigation if he suspects commission of cognizable offence or if the commission of such an offence is brought to his notice. Even if there is no specific report and police officer has only a suspicion, may be on the basis of an anonymous complaint, he is duty bound to investigate the same. Every citizen has constitutional rights to approach police and the Court when commission of cognizable offence is suspected. Various High Courts and the Apex Court have taken consistent view that the provisions of sections 235 to 242 do not have the effect of abrogating or repealing the provisions of the Cr.PC which deal with the powers of the police officer to investigate report about the commission of the cognizable offence. As observed, in the present case, FIR has been registered under order of the Court which order has not been challenged so far. The investigation is still in progress and at this stage, it is not possible to say that the allegations are totally groundless or on the face of it they do not make out any offence under the IPC. The provisions of sections 235 to 242 of the Act do not create any bar against an investigation by police officer if cognisable offence punishable under the IPC are suspected to have been committed in connection with the affairs of the company. In the result, this writ petition fails and is hereby dismissed.
|