TMI Blog2017 (11) TMI 1911X X X X Extracts X X X X X X X X Extracts X X X X ..... nging the jurisdiction or authority of 1st respondent to order investigation by SFIO. Therefore, the procedure followed by the 1st respondent alone is examined in this writ petition. According to Merriam Websters Dictionary of Law, the word opinion means a belief stronger than impression and less strong than positive knowledge Therefore, the 1st respondent is required to form an opinion i.e., something more than mere re-telling of gossip or hearsay and reflects judgment or belief resulting from what one thinks on a particular question. Such belief or conviction is manifested by 1st respondent in ordering investigation by SFIO - In the case on hand, this Court is of the view that the order dated 10.06.2016 of 1st respondent does not reflect forming opinion on the necessity for investigation by SFIO. The order impugned in the writ petition does not satisfy the requirements i.e., is of the opinion, that it is necessary to investigate in Section 212 (1) of the Act - the order is set aside - It is clarified that this Court has not examined the merits of the matter, and after perusing the record produced, the issue is remitted back to 1st respondent for re-consideration afresh in acco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 212 empowers the Central Government to order investigation into the affairs of a company by SFIO, however, by forming an opinion in this behalf. According to him, the recording of opinion, though is subjective, the order of Central Government for investigation into the affairs of a company by SFIO must reflect expression of at least the subjective opinion or forming of opinion for ordering investigation by SFIO. In the case on hand, the impugned order does not contain opinion and, on the other hand, refers to report sent by the Registrar of Companies under Section 2(8). Therefore, through impugned order investigation by SFIO is in breach of the requirement of Section 212 of the Act and is liable to be set aside. He relies on PARMESHWAR DAS AGARWAL AND ORS. v. THE ADDITIONAL DIRECTOR (INVESTIGATION), SERIOUS FRAUD INVESTIGATION OFFICE, MINISTRY OF CORPORATE AFFAIRS AND ORS and contends that the ratio laid down by the Division Bench squarely covers the contention raised by the petitioner and prays for setting aside the order etc., impugned in the writ petition. Respondents 1, 2 and 4 filed counter affidavit. The counter affidavit raises preliminary objections on the maintaina ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... und can be taken. According to him, sufficient material is with Central Government for ordering investigation by SFIO and further, in the case on hand, the investigation is ordered on a report forwarded by the Registrar of Companies under Section 208. The impugned order refers to the report of Registrar of Companies and it is a case of agreement with the report of Registrar by 1st respondent. Therefore, the 1st respondent is deemed to have complied with the requirement of Section 212. According to him, the order impugned is read with the report of Registrar of Companies. He further contends that on the contrary, the expression of any decision of opinion while ordering investigation could be complained as Central Government expressing final view while ordering investigation by SFIO. He produced the record from 1st respondent and by drawing the attention of the Court, to the reports received from Registrar, he contends that no exception to the order impugned dated 10.06.2016 could be taken. He further contends that ordering investigation, in the case on hand, is not for the sake of asking and the 1st respondent considered the material and thereafter formed the opinion. It is alter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... conferred under section 212 (1)(a) of the Companies Act, 2013 the Central Government hereby orders investigation into the affairs of M/s Church of South India Trust Association, to be carried out by the Serious Fraud Investigation office. 4. The Inspectors appointed by Director, SFIO to investigate into the affairs of the above mentioned company, shall exercise all the powers available to them under the Companies Act, 2013. The Inspectors shall complete their investigation and submit the report to the Central Government within a period of six (6) months from the date of issue of this order. 5. Further, if any information is required during the course of investigation, you are requested to depute some officer to coordinate with the Ministry for obtaining the desired documents/information. 6. This order is issued for and on behalf of the Central Government. Sd/- (Himanshu Shekhar) Deputy Director Section 212(1) a to d Investigation into affairs of company by Serious Fraud Investigation Office - (1) Without prejudice to the provisions of section 210, where the Central Government is of the opinion, that it is necessary to investigate into the affairs of a company ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... opinion, that it is necessary to investigate into the affairs of a company - (a) on the receipt of a report or the Registrar or inspector under section 208; (b) on intimation of a special resolution passed by a company that the affairs of the company ought to be investigated; or (c) in public interest it may order an investigation into the affairs of the company. (2) Where an order is passed by a court or the Tribunal in any proceedings before it then the affairs of a company ought to be investigated, the Central Government shall order the investigation into the affairs of that company. (3) For the purposes of this section, the Central Government may appoint one or more persons as inspectors to investigate into the affairs of the company and to report thereon in such manner as the Central Government may direct. xxxxxx xxxxxx Section 210 falling in the same Chapter XIV titled Inspection, Inquiry and Investigation contains these two sections. Section 210 confers a discretion in the Central Government to order an investigation into the affairs of the company and that power has to be exercised if there is an order passed by a Court or a Tribunal in any proceedings ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m amongst persons of ability, integrity and experience. The wide powers that this office enjoys, as is set out in various sub-sections of section 212, would denote as to how its involvement comes after the investigations are assigned to it by the Central Government. By their very nature the investigations into frauds relating to a company have to be assigned. They have to be of such magnitude and seriousness demanding involvement of experts in the fields enumerated in sub-section (2) of section 211. Therefore, while exercising the powers under sub-section (1) of section 212, the Central Government ought to be not only forming an opinion about the necessity to investigate into the affairs of the company, but further that such investigations have to be assigned to the SFIO. We do not think that there were materials in the present case and which can be termed as enough to warrant the exercise of power by the Central Government by resorting to section 212(1) of the Act of 2013. The Central Government, in the order under challenge, did not spell out any circumstances, except outlining its power under the above sections to order investigation into the affairs of a company in public in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d order and requirement of Section 212 independently. The petitioner is not challenging the jurisdiction or authority of 1st respondent to order investigation by SFIO. Therefore, the procedure followed by the 1st respondent alone is examined in this writ petition. According to Merriam Websters Dictionary of Law, the word opinion means a belief stronger than impression and less strong than positive knowledge Therefore, the 1st respondent is required to form an opinion i.e., something more than mere re-telling of gossip or hearsay and reflects judgment or belief resulting from what one thinks on a particular question. Such belief or conviction is manifested by 1st respondent in ordering investigation by SFIO. The words is of the opinion that it is necessary to investigate impose a jurisdictional duty on Central Government to form opinion on the necessity of investigation by SFIO. The material before Central Government is considered from the view point of necessity of such investigation by SFIO. Without again juxtaposing the operative portion of the order impugned in the writ petition, it can be held that the order impugned in the writ petition by itself does not show the existence ..... X X X X Extracts X X X X X X X X Extracts X X X X
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