TMI Blog2018 (12) TMI 1857X X X X Extracts X X X X X X X X Extracts X X X X ..... n that the Court in any manner has given its verdict on the same and/or expressed any final opinion about the same. The learned Single Judge so far as the investigation is concerned, has also directed that the investigation shall be conducted as per law and following the due process of law under the Act and the Rules thereunder and the SFIO shall certainly submit the report and shall suggest the future course of action after giving an opportunity of hearing to both the parties. As per Section 211, the Central Government has the power to direct the investigation by the SFIO. This is further clear from Section 212(1) which states that the investigation by the SFIO is conducted at the instance of the Central Government. The investigation is conducted where the Central Government is of the opinion that it is necessary to conduct an investigation into the affairs of the company and it also specifically enlists the cases under which such investigation can be ordered - Upon completion of the investigation by the officers of SFIO, the report also has to be submitted to the Central Government. The Court has the power while dealing with the matter under the Contempt of Courts Act, to o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to give an opportunity of hearing to both the parties before submitting its report and suggesting the future course of action. 2. Briefly stated, the case of the appellants in LPA 641/2016 is that, the appellant no. 1 Company M/s. Coastal Projects Limited is a company engaged in construction and engineering, procurement and construction services of infrastructure projects like metro rail, canal irrigation etc. The second appellant, Sabbineni Surendra along with his father Late Sabbineni Papaiah (respondent no. 2 in contempt case and died during the pendency of the case) were the promoters of the appellant no. 1 Company. Another appellant, Rajeev Dhingra in LPA 642/2016 was an employee of the appellant no. 1 Company, and held the position of Vice-President (Finance) in the said company until January 2014 where-after he stated to have resigned from the company. 3. On 28.03.2011 the appellant no. 1 Company entered into a Debenture Subscription Agreement with the respondent no. 1 and agreed to issue Compulsory Convertible Debentures ('CCDs', for short) having face value of ₹ 10,00,000/- (Rs. Ten Lakhs) by way of a private placement for cash aggregating a value of &# ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ions including RBI (the lenders of the appellant company) communicating its decision to declare the appellant no. 1 Company as a 'wilful defaulter'. 9. Aggrieved, the appellants filed a writ petition being W.P.(C) No. 393/2013 against the respondent no. 1 seeking to quash the aforesaid letters. Vide order dated 24.01.2013, the writ petition was disposed of with the consent of the parties in accordance with the terms of the settlement entered into between them whereby the appellants made a solemn promise to pay ₹ 100 crores to the respondent no. 1 in three installments in the following manner: (i) The first installment of ₹ 10 Crores will be paid by the petitioner to the respondent on or before 15.03.2013; (ii) The second installment of ₹ 15 Crores will be paid by the petitioner to the respondent on or before 20.04.2013; (iii) The third installment of ₹ 75 Crores will be paid by the petitioner to the respondent on or before 30.06.2013. 10. Upon the appellants undertaking to pay the aforesaid installments, the interim injunction order dated 23.11.2012 passed in OMP 1087/2012 was varied and additionally, the notices dated 11.01.20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Single Judge and the same has also been recorded in the impugned order, but nevertheless the learned Single Judge proceeded in a summary manner and passed a direction ordering the SFIO investigation. 20. The Constitution as well as the Criminal Procedure Code and other enactments have construed certain rights and duties and also the obligations that even an ordinary citizen has to inform the concerned authorities regarding a crime or the violation committed by any individual or body corporate, etc. The directions contained in the impugned order are nothing but a request and communication to the SFIO to initiate the action against the appellants, certainly, as per law and following the due process provided under the Act and the Rules there-under. 21. The Courts while exercising the powers under Article 226 or Article 32 of the Constitution of India or any other enactment or if it comes to the knowledge of the Court that there is breach, violation or crime committed by any individual or body corporate or legal entity, are fully empowered to communicate and/or direct and/or request the concerned authorities to investigate the matter and initiate the action, albeit, as per law a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essary as to which version of Zahira Habibullah Sheikh is a truthful version. It is necessary to do so because various documents have been placed to show that she had made departure from her statements/stands at different points of time. Allegations are made by Mr. P.N. Lekhi, learned senior counsel appearing for Zahira Habibullah Sheikh that she was being threatened, coerced, induced and/or lured by Teesta Setalvad. On the contrary, learned Counsel appearing for Teesta Setalvad submits that she was being threatened, coerced, lured or induced by others to make statements or adopt stands contrary to what she had stated/adopted earlier. In this delicate situation, the appropriate course would be to direct an inquiry to be conducted to arrive at the truth. We direct the Registrar General of this Court to conduct the inquiry and submit a report to this Court within three months. The Registrar General shall indicate in the report (a) if Zahira Habibullah Sheikh was in any-manner threatened, coerced, induced and/or in any manner pressurised to depose/make statement(s) in any particular way, by any person or persons, and (b) if the answer to (a) is in the affirmation, who the person/perso ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... law would be the same. The superior courts are even vested with the power of transferring investigation from one agency to another, provided the ends of justice so demand such action. of course, it is also a settled principle that this power has to be exercised by the superior courts very sparingly and with great circumspection. 24. Further, in Dharam Pal vs. State of Haryana and Ors., 2016 (2) ACR 1440, it was held by the Supreme Court as under: 20. Be it noted here that the constitutional courts can direct for further investigation or investigation by some other investigating agency. The purpose is, there has to be a fair investigation and a fair trial. The fair trial may be quite difficult unless there is a fair investigation. We are absolutely conscious that direction for further investigation by another agency has to be very sparingly issued but the facts depicted in this case compel us to exercise the said power. We are disposed to think that purpose of justice commands that the cause of the victim, the husband of the deceased, deserves to be answered so that miscarriage of justice is avoided. Therefore, in this case the stage of the case cannot be the governing fac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er of punishment per se but a communication by the Court that certain facts have come to light which were required to be communicated to the SFIO for them to decide whether they should examine the case within the powers conferred by the statute upon them. 28. Order of the Single Judge is not to be considered as an order of mandamus and direction to SFIO to conduct an inquiry without procedure prescribed by law. The SFIO is to act as per and within the framework of law. If any precondition or requirements are to be satisfied under the statute before investigation can be undertaken, the authority shall be bound to undertake the said steps and satisfy itself whether or not facts justify investigation and inquiry. In such circumstances, it would be the satisfaction of the authorities on due application of mind which would confer jurisdiction. We clarify that the impugned order does not substitute and does not bind the SFIO to record their satisfaction, one way or the other. 29. The observation and communication directed by the Single Judge is not an order of punishment under the Contempt of Courts Act. It is merely a communication given by the Court to SFIO in exercise of its ple ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on 208; (b) on intimation of a special resolution passed by a company that its affairs are required to be investigated; (c) in the public interest; or (d) on request from any Department of the Central Government or a State Government, the Central Government may, by order, assign the investigation into the affairs of the said company to the Serious Fraud Investigation Office and its Director, may designate such number of inspectors, as he may consider necessary for the purpose of such investigation. (2) Where any case has been assigned by the Central Government to the Serious Fraud Investigation Office for investigation under this Act, no other investigating agency of Central Government or any State Government shall proceed with investigation in such case in respect of any offence under this Act and in case any such investigation has already been initiated, it shall not be proceeded further with and the concerned agency shall transfer the relevant documents and records in respect of such offences under this Act to Serious Fraud Investigation Office. (3) Where the investigation into the affairs of a company has been assigned by the Central Government to Serio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r law for the time being in force on granting of bail. (8) If the Director, Additional Director or Assistant Director of Serious Fraud Investigation Office authorised in this behalf by the Central Government by general or special order, has on the basis of material in his possession reason to believe (the reason for such belief to be recorded in writing) that any person has been guilty of any offence punishable under sections referred to in sub-section (6), he may arrest such person and shall, as soon as may be, inform him of the grounds for such arrest. (9) The Director, Additional Director or Assistant Director of Serious Fraud Investigation Office shall, immediately after arrest of such person under subsection (8), forward a copy of the order, along with the material in his possession, referred to in that subsection, to the Serious Fraud Investigation Office in a sealed envelope, in such manner as may be prescribed and the Serious Fraud Investigation Office shall keep such order and material for such period as may be prescribed. (10) Every person arrested under sub-section (8) shall within twenty-four hours, be taken to a Judicial Magistrate or a Metropolitan Magi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e authority or income-tax authorities in respect of any offence or matter being investigated or examined by it under any other law. 31. As per Section 211, the Central Government has the power to direct the investigation by the SFIO. This is further clear from Section 212(1) which states that the investigation by the SFIO is conducted at the instance of the Central Government. The investigation is conducted where the Central Government is of the opinion that it is necessary to conduct an investigation into the affairs of the company and it also specifically enlists the cases under which such investigation can be ordered. 32. Upon completion of the investigation by the officers of SFIO, the report also has to be submitted to the Central Government. 33. The Court has the power while dealing with the matter under the Contempt of Courts Act, to order for an investigation of the matter which comes in the knowledge of the Court regarding any violation, breach of law etc. and such a power stands derived from the Constitution itself, hence the submission of the learned counsel for the appellants that the Court cannot pass any direction for investigation while dealing with the co ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
