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2016 (6) TMI 218 - HC - Companies LawInvestigation u/s 235(2) to investigate the affairs of a company - CLB quashed the investigation proceedings - Maintainability of appeal - Held that:- The present appeal oversteps its statutory applicability. What is undisputed is that the appellant fails to meet the threshold of 10% share of the total voting power as is necessary under section 235 of the Act. Therefore, that is his first impediment in directing an investigation and the application under section 235 as well as this appeal would not be maintainable. Furthermore, in section 397 and 398 of the Act, which deals with application for relief in cases of oppression and mismanagement respectively, required the applicant to have at least 10% of the issued share capital. It is only in applications under Section 397 and 398 of the Act, where the challenge in such applications is to reduction of the issues share capital itself, through oppression or mismanagement then the threshold of 10% would not be applicable. The impugned order has recorded that, according to the respondents, there was some deed of settlement signed on 12.07.2010 and that the respondents had invested an amount of ₹ 12.7 crores whereas the appellants had made investment of only ₹ 1 lakh at the time of incorporation of the said company, which amount has already been paid back to him by the investors' group of companies. Any investigation under Rule 235 of the Act would be a fact finding process and such power would be administrative in nature. However, since the facts were already known to the parties, through the statutory filings of the company, no further information would come out from the investigation. Indeed the said information has already been placed before the various law enforcing agencies by the appellants for them to carry out their respective necessary action. Evidently, the impugned order takes into account all the relevant facts and has come to the conclusion that the circumstances under Section 237 do not exist to warrant an investigation.
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