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2013 (3) TMI 323 - CALCUTTA HIGH COURTStand-alone petition under Section 247(1A) of the Companies Act - Can an independent petition u/s 247(1A) may be carried before CLB for an order of investigation thereunder in the absence of the word “other” before the word “proceedings” in the relevant expression? - Held that:- The expression “in the course of any proceedings before it” would, loosely, imply “during any proceedings”. If Section 247(1A) is read as giving the CLB unfettered authority in all circumstances to declare by an order that the affairs of a company ought to be investigated as regards the matters specified in such provision, it would result in the expression “in course of any proceedings before it” being rendered otiose. That would be impermissible by any rule of construction. The authority under Section 247(1A) of the Act can, doubtless, be exercised suo motu by the CLB. But the caveat that the expression “in the course of any proceedings before it” introduces in the provision, mandates that the suo motu authority be exercised only during the pendency of any proceedings before the CLB. If the appropriate interpretation of Section 247(1A) of the Act is that the authority to direct an investigation thereunder may be exercised by the CLB suo motu or at the instance of any other person, in the absence of any express provision making a distinction between the two situations, the expression “in the course of the proceedings before it” would apply to either, and, as a corollary, it would carry the same meaning in either case. Though the word “any” in the relevant expression would exclude any limitation or qualification, such word cannot be read in isolation of the words “in course of” appearing in the same cluster of words. The words “in course of” govern the words “any proceedings” and imply that the nature of the proceedings would be irrelevant as long as the authority is invoked or exercised in course of such proceedings. The extent of exercise of the authority will, however, be guided by the nature of the pending proceedings. There are lesser reasons for discerning that Section 247(1A) of the Act does not contemplate a stand-alone petition for invoking the authority prescribed thereunder. In several provisions, or clusters of provisions, in the Act which are capable of being directly invoked without reference to any other, the circumstances giving the right to apply thereunder are generally specified. Since Section 247(1A) of the Act was not meant to be directly invoked – or such provision being taken recourse to only for the purpose of an investigation being directed thereunder – it does specify who may apply thereunder or who may be heard in course thereof. In the absence of the guidelines in the provision itself as to when and how the authority thereunder may be invoked or exercised – the two inevitable questions on the bounds of authority in any judicial or quasi-judicial jurisdiction, where limitlessness may not be presumed unless expressly specified or by unavoidable implication – the answers to the questions have necessarily to be found in the expression “in the course of the proceedings before it” in Section 247(1A). The clue to when such power may be exercised is in the understanding of the expression to imply “during any pending proceedings”, which, in turn, will bring the scope of the pending proceedings into play to provide a key to how the authority may be exercised. Section 247(1A) of the Act provides for wide inquisitorial powers being exercised by the CLB. The order sought were only in furtherance of the investigation under Section 247(1A) of the Act. That is not to suggest that Section 247(1A) of the Act could have been invoked only on the strength of a prayer under Section 237(b) of the Act being carried in the same petition, but that is an altogether different matter. The appeal and the application are allowed.
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