TMI Blog2017 (9) TMI 195X X X X Extracts X X X X X X X X Extracts X X X X ..... er. For example, the allegation is that potato seeds have been imported in India without the requisite sanction from the Government of India. There is no document placed on record showing at least the import of potato seeds or its use or sale. Likewise, there are vague allegations without any substation that assets of 'Simplot India' were illegally sold and sale proceeds were misappropriated. There is not an iota of evidence as to the nature of assets whether land, movable assets or any other. There is no evidence when it was sold. A roving enquiry in law is prohibited by law laid down by Supreme Court Barium Chemicals Ltd. (supra). It is extremely difficult-nay impossible to consider such an allegation as credible information for triggering the investigation process. We, therefore, have remained unable to persuade ourselves to accept the prayer made by the petitioners. The issue concerning impugned meetings held on 08.10.2016, 24.10.2016 and 09.12.2016 at Seattle, Washington would also not be sufficient for us to pass an order concerning investigation. There is no denial by the respondents that the meetings were held and even explanation for holding that meeting have been tende ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of such circumstances which would lead to the conclusion that an investigation is imperative and must be ordered. In that regard, we place reliance on a judgment of Hon'ble Delhi High Court in the case of Delhi Flour Mills Co. Ltd., In re. [1975] 45 Comp. Case 33 (Delhi). For a similar view, we also place reliance on the observations made by the Hon'ble Supreme Court in the case of Barium Chemicals Ltd. v. CLB [1996] 36 Comp Cas 639 and Rohtas Industries Ltd. v. S.D. Agarwal[1969] 39 Comp. Cas. 781 (SC) . A Five Judge Bench in Barium Chemicals Ltd. (supra), after making a reference to Section 237(b) of the erstwhile Companies Act, 1956 has held that the exercise of power to order investigation is discretionary and it depends upon the honest formation of an opinion that an investigation is necessary. The next requirement is that circumstances must exist suggesting certain inferences to be drawn. Referring to such inferences, the majority view has noted as under: In dealing with this problem the first point to notice is that the power is discretionary and its exercise depends upon the honest formation of an opinion that an investigation is necessary. The words in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on to order investigation is limited to the extracted grounds. An order of investigation which is not based on the circumstances suggesting an inference of the kind extracted from (a) to (d) would not be valid. Apparently, there is absence of a general direction to go on a fishing expedition to find evidence. Although the formation of opinion is subjective but the existence of circumstances relevant to the inference is a sine qua non for exercise of jurisdiction. It has further been observed that it is not sufficient to assert that the circumstances exist and give no clue to what they are because the circumstances must be such as to lead to conclusions of certain definiteness. The conclusions must relate to an intent to defraud, a fraudulent or unlawful purpose, fraud or misconduct or the withholding of information of a particular kind. In other words the circumstances as pointed out above do not exist then no inference of the kind stated in extracted paras (a) to (d) could be drawn and the prayer for investigation must fail. 4. We are also fortified in our view taken by the Division Bench judgment of Hon'ble Delhi High Court in the case of Modi Industries Ltd. v. Union of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... id down . 7. 'Simplot India' deals with food item and opening of retail outlets. It is alleged that respondent Nos. 2 to 7 are in complete control and possession of 'Simplot India' with all accounts and documents since 2011. It is further alleged that respondent Nos. 2 to 7 have not rendered accounts concerning 'Simplot India' concerning its full production, sale, marketing expenses including profit and loss account of the petitioners. They have not filed any audited reports and balance-sheet, which are mandatory in law. The assets of Simplot India have been sold without the proper Board Resolution by respondents 2 to 7 unilaterally with criminal intent and they have also squandered the fund. There are further allegations that petitioner no. 2 invested about US$ 2 million in 'Simplot India' in the form of equity and that the respondents have by their deliberate, reckless criminal intent of annihilating the petitioner have caused an illegal and wrongful loss to them because the respondents have all the custody and the physical possession of all the documents and account. 8. There are further allegations against respondent No. 5 that 50% partner ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing Competition Commission of India; 92/2013 HIL v. HSPL. SIFPL, Comida, Simplot India LLC Dismissed Competition Appellate Tribunal, New Delhi 18 of 2014/105 HIL v. HSPL, SIFPL, Comida, Simplot India LLC Dismissed High Court of Delhi at New Delhi: Co. Pet.371 of 2014 Simplot India LLC v. HIL Dismissed High Court of Delhi at New Delhi: RFA(OS) 57/2014 HILv. SIFPI. Dismissed High Court of the Republic of Singapore: OS 695/2015 HIL v. Simplot India LLC, SIFPL Concluded High Court of Delhi at New Delhi: CS(COMM) 257 OF 2017 HIL, Ajay Kaushik. Gaurav Soni, Keshav Sharma. Manmohan Malik v. SIFL, Simplot India LLC. HSPL, Scott Simplot, Kevin Storms, Ian Skyring and JR Simplot Co. Pending Registrar of Companies; ROC/DL/COMP/2016/16557 Man Mohan Malik Complaint re HSPL Pending Singapore International A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s after March 2013 and prayer for investigation of this company remains only a dream of the petitioner. 13. We have heard learned Counsel for the parties at length and have perused the record with their able assistance. 14. We repeatedly asked learned Counsel for the petitioner to show any document or evidence which may lead us to draw an inference with regard to the allegations and averments made in various paras of the petition. We also candidly told him that these averments cannot constitute the basis for us to conclude that any fraud exists since no intention has been displayed by some persuasive record to conclude the existence of fraudulent transaction. The expression 'averment' is a formal statement including an offer of proof or substantiation which is completely missing. 15. When we apply the principles extracted from the Five Judge Constitution Bench rendered in Barium Chemicals Ltd. (supra), we fail to find any substantial allegation disclosing credible information for us to conclude that respondents had been acting with an intention to commit fraud or mis-appropriate or commit any act of any misfeasance. The allegations merely remain the figment of imag ..... X X X X Extracts X X X X X X X X Extracts X X X X
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