M/S KASHISH DEVELOPERS LTD THRU ITS AUTHORIZED SIGNATORY CUM CHIEF FINANCIAL OFFICER NIRAJ KUMAR vs UNION OF INDIA, MIN OF CORPORATE AFFAIRS, THROUGH ITS SECRETARY
- Court
- Jharkhand High Court
Neutral Citation
2026:JHHC:31596
IN THE HIGH COURT OF JHARKHAND AT RANCHI
W.P. (Cr.) No. 697 of 2025
M/s Kashish Developers Limited, (a company registered
under the Companies Act, 1956/2013), having its registered
office at 87, Old A.G. Colony, Kadru, P.O.- Doranda, P.S.-
Argora, Dist.- Ranchi, Jharkhand-834002, through its
Authorized signatory cum Chief Financial Officer, namely, Niraj
Kumar, S/o Vishwanath Mishra, R/o 11-A, Saket Nagar, Near
Royal Public School, Hinoo, P.O. & P.S.- Doranda, Dist.-
Ranchi. --- --- Petitioner
Versus
1. Union of India.
2. Serious Fraud Investigation Office, through its
Director/Joint Director, having its office at 5, Esplanade
nd
Estate, 2 Floor, P.O. & P.S.- Esplanade East, Dist.- Kolkata
(West Bengal), PIN-700069.
3. Joint Director, Eastern Region, Serious Fraud Investigation
nd
Office, having its office at 5, Esplanade Estate, 2 Floor, P.O.
& P.S.- Esplanade East, Dist.- Kolkata (West Bengal), PIN-
700069.
4. Inspector/Investigating Officer, Serious Fraud Investigation
Office, Eastern Region, having its office at 5, Esplanade
nd
Estate, 2 Floor, P.O. & P.S.- Esplanade East, Dist.- Kolkata
(West Bengal), PIN-700069. --- --- Respondents
---
CORAM: HON’BLE MR. JUSTICE RONGON MUKHOPADHYAY
---
For the Petitioner : Mr. Amit Kumar Das, Sr. Adv.
Mr. Sumeet Gadodia, Adv.
Mr. Anish Lal, Adv.
Mr. Vinit Sinha, Adv.
Mr. Ritesh Gupta, Adv.
Mr. Prakhar Harit, Adv.
For the UOI. : Mr. Prashant Pallav, ASGI
---
CAV On: 15.09.2026 Pronounced On: 27.10.2026
JUDGMENT
1. Heard Mr. Amit Kumar Das, learned senior counsel
for the petitioner and Mr. Prashant Pallav, learned ASGI.
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2. In this writ application, the petitioner has prayed
for the following reliefs:
“ (i) For issuance of an appropriate
writ/order/direction directing Respondent
No.1 to produce before this Hon'ble Court,
Order bearing F. No. CC-II/18/2024 O/o
DGCOA- MCA dated 17.06.2025 including
issuance of Writ of Certiorari for quashing of
aforesaid order, wherein investigation under
Section 212(1)(c) of the Companies Act, 2013
has been directed to be initiated against
Petitioner-company.
(ii) For issuance of further appropriate
writ/order/direction for quashing/setting
aside Notice issued vide DIN
2026202503197838Cx dated 22.07.2025
(Annexure-8) including all subsequent
proceedings pursuant thereto, wherein
investigation pursuant to direction of
Respondent No.1 has been initiated under
Section 212(1)(c) of the Companies Act, 2013
against Petitioner-company by Respondent-
Serious Fraud Investigation Office (hereinafter
referred to as 'SFIO' for short).
(iii) For issuance of further appropriate
writ/order/direction including Writ of
Declaration declaring that passing of order
under Section 212(1)(c) of the Companies Act,
2013 directing 'SFIO' to carry out investigation
against Petitioner-company, is beyond the
scope of Section 212 of the Companies Act,
2013, as formation of opinion is vitiated having
been arrived at despite 'non-existence of any
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relevant circumstances’.
(iv) For issuance of any other appropriate
writ(s)/order(s)/direction(s) as Your Lordships
may deem fit and proper in the facts and
circumstances of the case. ”
3. The factual aspects of the case reveal that the
petitioner-company is in the business of promotion,
development and construction of commercial/residential
premises and had launched a Group Housing Project named
as “Manor One” at Sector III, Gurugram, Haryana in the year
2013. The construction work in respect of the said housing
project progressed without any impediment up to the year
2015, but subsequently it was adversely affected due to
disbursement of loan by a loaner, i.e., Dewan Housing
Finance Corporation Limited (DHFL for short) including
stoppage of payment by certain home buyers. It has been
stated that DHFL had sanctioned a loan of about Rs. 725.00
crores for revival of the project in the month of March 2018,
but only Rs. 503.00 crores could be disbursed and
thereafter, DHFL itself entered into insolvency and the
balance amount, therefore, could not be disbursed. In spite
of the efforts and difficulties, the petitioner-company
continued the construction work to the best of its ability and
simultaneously, the petitioner-company was facing
numerous complaints from a small group of home buyers
who were taking refund of their amount including initiation
of proceedings before various forums. Initially, in the month
of March 2020, two of the home buyers who were seeking
refund lodged a complaint before the Economic Offences
Wing (EOW), New Delhi but since the project of the
petitioner-company was falling within the territorial
jurisdiction of EOW, Gurugram the said complaint was
forwarded by EOW, New Delhi to EOW, Gurugram. The
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EOW, Gurugram in respect of the said complaint initiated by
various home buyers made a detailed enquiry and submitted
a report on 19-09-2020 opining therein that the complaint
was devoid of merit. However, despite the said finding, the
said home buyers made a fresh complaint which was
registered as FIR No. 0200/2020 dated 17-11-2020 with
EOW, New Delhi. During the pendency of the said FIR, the
Government of India formulated a policy for revival of stale
real estate projects known as “SWAMIH INVESTMENT
FUND”. The petitioner-company had applied for
disbursement of fund under the said scheme and after an
exhaustive exercise conducted by the Ministry of Finance
through reputed consultants, financial sanction was
accorded in favor of the petitioner-company for revival of the
project vide Sanction Order dated 29-01-2022. A
pre-condition was prescribed in SWAMIH INVESTMENT
FUND that any attachment order against the property
passed by any court would be settled by the petitioner so
that the funds can be disbursed for revival of the finance of
the project. It has been stated that pursuant to the order
passed by the National Consumer Dispute Redressal
Commission, the project land of the petitioner-company was
attached by the Office of the Tehsildar, Gurugram and the
said attachment order was required to be withdrawn before
any funds could be disbursed in favour of the petitioner-
company under the SWAMIH INVESTMENT FUND.
Recognizing the importance of release of funds through
SWAMIH INVESTMENT FUND, several homebuyers had
extended support to the petitioner-company, but a small
group of dissenting allottees/homebuyers persisted in
obstructing resolution of dispute including release of funds
of SWAMIH INVESTMENT FUND. Certain orders of
attachment were passed by the Tehsildar, Gurugram in the
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project land of the petitioner-company at Sector- III,
Gurugram which was challenged before the Punjab &
Haryana High Court and vide order dated 26-09-2022, the
said orders were quashed and it was observed that certain
customers/homebuyers were acting mala fide and in an
unreasonable manner. The impediments having vaporized
on account of the said order, fresh sanction was granted
under SWAMIH INVESTMENT FUND vide Sanction Order
dated 12-01-2023 pursuant to which even the funds were
released in favor of the petitioner-company. Disbursement
was made to 34 homebuyers and compromises were entered
into between all the homebuyers and the petitioner-company
and consequently, the petitioner-company approached the
High Court of Delhi for quashing of the FIR being FIR
No. 02000/2020 and vide order dated 09-01-2024, the FIR
and all the consequential proceedings emanating therefrom
were quashed. Despite such quashment, the Ministry of
Corporate Affairs, New Delhi vide Order bearing
F. No. CC-II/18/2024 O/o DGCOA-MCA dated 17-06-2025
ordered for investigation under Section 212(1)(c) of the
Companies Act 2013 into the affairs of the petitioner-
company by the Serious Fraud Investigation
Office. Consequent to the said order, the
petitioner-company had received the first notice bearing
DIN2026202503197838Cx dated 22-07-2025 directing the
petitioner to produce certain documents. A reply was given
to the notice dated 22-07-2025 vide letters dated 31-07-2025
and 28-08-2025 annexing documents in support of the
contents of the letters. The petitioner-company had also filed
a representation before the Ministry of Corporate Affairs and
SFIO bringing all the facts to their knowledge with a request
for withdrawal of the order of investigation, but having found
no success, the petitioner-company has approached this
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Court for redressal of its grievance through the present writ
application.
4. During the hearing of this writ application, a
preliminary objection was raised by Mr. Prashant Pallav,
learned ASGI regarding the maintainability of the writ
application on the ground of territorial jurisdiction and after
hearing the parties, an order was passed on 07-09-2026
holding that this Court has the territorial jurisdiction to hear
this writ application and consequent to the same, both the
learned senior counsels were heard at length on the merits
of the case.
5. It has been submitted by Mr. Amit Kumar Das,
learned senior counsel for the petitioner that the impugned
order dated 17-06-2025 is founded upon only one
circumstance, i.e., the CEIB letter dated 28-01-2021
forwarding FIR No. 0200/2020. However, the said
foundation had ceased to exist in law on 09-01-2024 when
the High Court of Delhi had quashed the First Information
Report and all consequential proceedings emanating
therefrom and, therefore, the opinion formed was on the
basis of a non-existent circumstance. Mr. Das, learned
senior counsel has submitted that the impugned order dated
17-06-2025 is devoid of application of mind and is contrary
to the safeguards which are intrinsic to Section 212(1)(c) of
the Companies Act, 2013. In such context, reference has
been made to the case of Nita Puri v. Union of India
reported in 2025 SCC OnLine Del 5941 . Mr. Das, while
referring to the counter affidavit, has submitted that
whatever grounds have been taken in the said affidavit
cannot defeat the inherent flaws in the impugned order as
they do not constitute the circumstances upon which the
opinion was formed. In other words, according to Mr. Das,
while taking a cue from the judgment of Nita Puri(supra),
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“boiler plate” language has been deprecated in the said
judgment and precisely the same has been used by the
respondent. It has been submitted that invocation of public
interest under Clause (c) of Section 212 (1) is a bare assertion
and the counter affidavit nowhere discloses what public
interest survived after; a) Closure report dated 19-09-2020,
b) Quashing of FIR on 09-01-2024, c) Two rounds of due
diligence and sanction by the Ministry of Finance under the
SWAMIH INVESTMENT FUND, d) Findings of the Punjab &
Haryana High Court in the order dated 26-09-2022 and e)
Settlement of the home buyers claim. The respondents
cannot travel beyond the impugned order and improve their
case in the counter affidavit. Reference has been made to the
case of Mohinder Singh Gill & Anr. v. The Chief Election
Commissioner, New Delhi & Ors. reported in (1978) 1 SCC
405. Mr. Das, learned senior counsel has submitted that the
specific averment made in Para 38, 40 and 41 of the writ
application that the opinion rests upon a non-existing
circumstance has remained uncontroverted in the counter
affidavit.
While underlying the scope of judicial review of an
order under Section 212 of the Companies Act, 2013,
Mr. Das, learned senior counsel has submitted that there is
a fine distinction regarding the circumstances necessitating
review or otherwise as when there is a subjective satisfaction
based on the adequacy or correctness of the materials
available on record, a review is not ordinarily permissible, but
when there is absence of any nexus between the
circumstances and the formation of opinion, the Court does
have the power to examine the decision making process and
there being inadequacy of materials and absence of subjective
satisfaction, the impugned order can be reviewed and visited
by the courts. Reference has been made to the case of
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Rampur Distillery and Chemical Co. Ltd. v. Company
Law Board reported in (1969) 2 SCC 774 and Parmeshwar
Das Agarwal v. Additional Director (Investigation), SFIO
reported in 2016 SCC OnLine Bom 9276. It has been
submitted that in Nita Puri (supra) , it has been held that “all
the relevant circumstance/s must be taken into account and
the existence of the same must be “demonstratable”, for the
purpose of forming an opinion under Section 212(1)(c) of the
Act, 2013”. Mr. Das, learned senior counsel has also
submitted that the judgment relied upon by the respondent
in Karvy Stock Broking Ltd. v. Union of India reported in
2020 SCC OnLine TS1048 has itself held that “the
necessary concomitant is existence of prime facie
circumstances which should be demonstratable before the
Court when questioned…… and if the same are found to be
defective, the action contemplated is justifiable”. The
assertion that a notice under investigation cannot be
interfered with at the threshold has no application when the
very foundation of the investigation is assailed as non-
existent.
It has been submitted that the order of
investigation into the affairs of the petitioner-company has
jeopardized the construction of approximately 1000
residential flats. The project comprises of 18 towers, out of
which only 5 towers have been completed and handed over,
while the remaining 13 towers are yet to be completed and
delivered to hundreds of home buyers. Any disruption of the
project will seriously prejudice the interests of such home
buyers from receiving possession thereby creating immense
personal hardship for third party stakeholders and defeating
the broader public objective of delivering affordable housing.
The project of the petitioner-company is being financed by
SWAMIH INVESTMENT FUND, a Category-II alternative
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investment fund anchored by the Ministry of Finance,
Government of India and managed by SBI Ventures Limited
and halting operation risks defaulting on priority debt
obligations, thwarting public capital drawn from the
government and public sector institutions like LIC, SBI and
HDFC. The SWAMIH funding operates under stringent post
funding monitoring requiring ring fenced escrow accounts
with payments strictly tied to a verified physical construction
milestone. Any adverse order will paralyze these collateral
cash flows, freezing operations despite existing financial
controls. Mr. Das, in course of his elaborate submissions,
has prayed that the present writ application be allowed.
6. Mr. Prashant Pallav, learned ASGI appearing for
the respondents has submitted that the investigation
conducted by SFIO is in terms of reference under Section
212(1)(c) of the Companies Act, 2013 by which the Central
Government may direct an investigation into the affairs of a
company in the public interest. The words “public interest”
cannot be given a restrictive meaning; the meaning of the
words “public interest” is wide and would include hundreds
of the members of the public whose interest are seriously
jeopardized and impacted by acts of omission and
commission of the companies in the present case at hand.
There are inputs from the Central Economic Intelligence
Bureau and other sources which alleged diversion of huge
funds thus requiring investigation into the offences of the
company. It has been submitted that the contention of the
petitioner is primarily based on the ground that the opinion
which led to the order dated 17-06-2025 by which a direction
was issued to investigate the offences of the company was
not preceded by an opinion which is mandatory under
Section 212 of the Companies Act, 2013 and that the
material based upon which such opinion has been formed
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ought to be disclosed. However, according to Mr. Prashant
Pallav, learned ASGI, such disclosure would be contrary to
“public interest”. While exercising powers under Section 212
of the Companies Act, 2013, the Central Government is only
required to demonstrate that there are objective materials
available with the government to form an opinion and such
an opinion has to be subjective opinion which is bona fide
and genuine. The issues pertaining to the proprietary,
reasonableness or sufficiency of such an opinion cannot be
conveyed at the stage of investigation. Reliance in such
context has been placed in the case of Adarsh
Throughworks Pvt. Ltd. v. Union of India reported in
MANU/GJ/0496/2019 . While passing the order, the High
Court has held that the declaring the material on which such
opinion is formed would be detrimental to public interest.
Mr. Prashant Pallav, learned ASGI has furthered his
argument by submitting that no prejudice is caused to the
petitioner if the investigation is allowed to continue as there
are additional conditions for initiating prosecution which
would be subject to the scrutiny of the Courts. It is not for
the Courts to sit in appeal over the decision of the Central
Government in ordering an investigation into the affairs of
the company. The jurisdiction of the Courts is limited to
examining the decision-making process and not the decision
itself. In the present case, there is nothing to indicate that
the decision-making process is, in any way, jeopardized
and/or rendered inconceivable/illegal due to any deviation.
The order itself shows that there is enough objective material
for the Central Government to have arrived at a subjective
opinion. The materials on the basis of which the opinion has
been formed in the impugned order is apparent from
paragraph 6 of the counter affidavit which categorically
makes reference to the inputs by the Central Economic
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Intelligence Bureau. As such, there is enough material to
investigate into the affairs of the petitioner-company
especially on the issue of siphoning of funds. The Central
Government is invested with a discretionary power to order
an investigation into the affairs of the petitioner-company.
The object behind vesting of such power upon the Central
Government, as per Mr. Prashant Pallav, is to unearth any
omission or commission which will be prejudicial to the
interest of the shareholders or the public at large. The
discretion to be exercised is to be demonstrated by reasons
and relevant materials which have apparently been taken
into consideration by the Central Government while forming
an opinion. It has been submitted that the investigation into
the affairs of the petitioner-company is not limited to the
dispute between the petitioner-company and the home
buyers but is also with respect to the loan of Rs. 725 crores
from DHFL by submitting false documents and siphoning of
the funds for personal gains. The First Information Report
was quashed on the basis of settlements arrived at between
the parties, but such settlements do not absolve the acts of
the petitioner-company which is in contravention to the
provisions of the Companies Act, 2013.
7. I have heard the learned counsel for the respective
parties and have also perused the affidavits on record.
8. The first complaint which was initially lodged with
the Economic Offences Wing, New Delhi and later on
transferred to Economic Offences Wing, Gurugram on the
ground of territorial jurisdiction was enquired into and the
findings recorded in the report dated 19-09-2020 reads as
follows:
“ As per above, the company was to complete
and handover flats to the complainants in the year
2016. But the construction has not been completed
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till date and the possession of the flats have not
been given to the investors. But the company has not
completed and handed over the possession of the
flats. From the investigation carried out till now, it
has been found that after taking Rs.9,95,40,470/-
from the complainants towards flat booking, the
company has not given the possession of the flats
on time, therefore, all the complainants filed their
respective complaints before Hon'ble N.C.D.R.C.
Commission, New Delhi. Hon'ble Commission heard
the complaints of the complainants and while
deciding the all complaints of the complainants,
passed orders to refund the monies taken from each
complainants along with 10% simple interest and
Rs.25,000/- legal expenses to each complainant for
not completing the project and not handing over the
flat as per the B.B.A. entered into between the both
the parties. For compliance of the aforesaid Order,
the complainants had filed a case in the Hon'ble
N.C.D.R.C., New Delhi, in the year 2019, which is
pending adjudication, in which the next date of
hearing has been fixed as 13.10.2020. During the
investigation, in relation to the allegations leveled in
the complaint, the Bank Stateinent of Account
No.50513406111 of Kashish Media obtained from
Allahabad Bank. In which Rs. 10,20,000/- have
been transferred from the account of Kashish
Developers Ltd. to the account of Kashish Media. In
this regard, the respondent company in its reply has
filed the bank statement of account
No.00000032939897370 of SBI Bank of Kashish
Developers Limited, in which the money has been
received from Kashish Media. During the
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investigation, it was found that the complainants
had made bookings in the Project Manor 1, Sector
111, Gurugram of Kashish Developers Limited in the
year 2012-13, and BBAs were executed between
both the parties in which various terms and
conditions were agreed. Due to not handing over of
possession of the flats on time as per the terms of
the BBA, the complainants have obtained Orders for
refund of money along with compensation from the
competent Commission by filing complaint and for
compliance of the same, the complainants have filed
a case in NCDRC, New Delhi, the next date of
hearing of which has been fixed as 13.10.2020.
From the investigation of the case, no congnizable
offence has been found to have been committed.
Therefore, the report is being submitted with
recommendation to file the case. ”
9. The aforesaid finding reveals that the complainants
had approached the National Consumer Dispute Redressal
Commission which had passed orders for refund of the
amount to each complainant along with 10% simple interest
and Rs. 25,000/- as legal expenses and for compliance of
which, separate cases have been filed before the Commission.
Subsequently, recovery certificates dated 06-06-2019 were
issued and warrants of attachment dated 15-09-2020 were
also issued attaching 14.83 acres of land. The Orders of
Attachment was challenged before the Punjab and Haryana
High Court in CWP-5323-2022 and analogous cases and the
same were quashed vide order dated 26-09-2022 rendering
the following reasons:
“ There can be no dispute with the proposition
of law that a secured creditor having exclusive
charge on the security has a better right than a
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decree holder. Learned counsel representing the
decree holders who have not settled with the
builder, has not been able to raise any argument to
the contrary. Thus, the orders of attachment are
liable to be set aside on this sole ground.
Subsequent events have intervened. As noticed
earlier, SWAMIH fund has offered to revive the
project by infusion of funds. This is evident not only
from the communications placed on record by the
petitioners in CWP-16862-2020 but also from the
confirmation given by the counsel representing the
said fund. The submission that the project is likely
to be completed in the following two years has also
not been controverted. Factum of execution of
supplementary builder buyer agreements providing
for payment of compensation and promising no
increase in the cost of dwelling units/charging of
additional developmental cost has also not been
denied. It is also clear that barring a few, the
remaining home buyers (including decree holders)
are in support of revival of the project. According to
learned senior counsel representing the petitioners
in CWP-19174-2022 there are a total number of 280
home buyers. The record of CWP-16862-2020
shows that the objectors are only 12 in number.
Thus, the majority is in favour of revival of the
project. Hence, the refusal of the objectors to settle
with the builder appears to be ill advised. The law
also leans in favour of revival of the project as the
same would be in the larger interest of the economy.
It would generate employment, result in recovery of
public money and provide returns for the money
invested by the home buyers. The adamant attitude
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of a few cannot be permitted to stand in the way of
larger good. Thus, the writ petitions are allowed and
warrants of attachment dated 15.09.2020 are
quashed. ”
10. In the said case, a plea of fraud was raised by the
respondents regarding the loan transaction of
Rs. 725 crores, but the same was negated on the ground that
even if it is assumed that the loan transaction is fraudulent
but the same would not automatically result in upholding
the orders of attachment because there is no intimate
relationship between those transactions.
11. The First Information Report which was instituted
being FIR No. 0200/2020 despite the Economic Offences
Wing, Gurugram coming to a conclusion that the allegations
are devoid of merit vide report dated 19-09-2020 was
challenged before the High Court of Delhi by the petitioner-
company under Section 482 Cr.P.C. and based on a
compromise, the said FIR and all consequent proceedings
emanating therefrom were quashed. The quashing of the
First Information Report and all consequent proceedings is
one of the pivotal grounds upon which the edifice of the case
is built as the opinion formed on 17-06-2025 is an opinion
formed upon a non-existent circumstance.
12. Some relevant provisions in the Companies Act,
2013 in order to adjudicate upon the rival submissions are
necessary to be taken note of. Chapter XIV of the Companies
Act, 2013 is headlined inspection, enquiry and investigation
and the same is initiated by Section 206 which reads as
under:
“ 206. Power to call for information,
inspect books and conduct inquiries.—( 1) Where
on a scrutiny of any document filed by a company
or on any information received by him, the Registrar
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is of the opinion that any further information or
explanation or any further documents relating to the
company is necessary, he may by a written notice
require the company—
(a) to furnish in writing such information or
explanation; or
(b) to produce such documents, within such
reasonable time, as may be specified in the
notice.
(2) On the receipt of a notice under sub-section (1), it
shall be the duty of the company and of its officers
concerned to furnish such information or
explanation to the best of their knowledge and
power and to produce the documents to the
Registrar within the time specified or extended by
the Registrar: Provided that where such information
or explanation relates to any past period, the officers
who had been in the employment of the company for
such period, if so called upon by the Registrar
through a notice served on them in writing, shall
also furnish such information or explanation to the
best of their knowledge.
(3) If no information or explanation is furnished to
the Registrar within the time specified under sub-
section (1) or if the Registrar on an examination of
the documents furnished is of the opinion that the
information or explanation furnished is inadequate
or if the Registrar is satisfied on a scrutiny of the
documents furnished that an unsatisfactory state of
affairs exists in the company and does not disclose
a full and fair statement of the information required,
he may, by another written notice, call on the
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company to produce for his inspection such further
books of account, books, papers and explanations
as he may require at such place and at such time as
he may specify in the notice: Provided that before
any notice is served under this sub-section, the
Registrar shall record his reasons in writing for
issuing such notice.
(4) If the Registrar is satisfied on the basis of
information available with or furnished to him or on
a representation made to him by any person that the
business of a company is being carried on for a
fraudulent or unlawful purpose or not in compliance
with the provisions of this Act or if the grievances of
investors are not being addressed, the Registrar
may, after informing the company of the allegations
made against it by a written order, call on the
company to furnish in writing any information or
explanation on matters specified in the order within
such time as he may specify therein and carry out
such inquiry as he deems fit after providing the
company a reasonable opportunity of being heard:
Provided that the Central Government may, if it is
satisfied that the circumstances so warrant, direct
the Registrar or an inspector appointed by it for the
purpose to carry out the inquiry under this sub-
section: Provided further that where business of a
company has been or is being carried on for a
fraudulent or unlawful purpose, every officer of the
company who is in default shall be punishable for
fraud in the manner as provided in Section 447.
(5) Without prejudice to the foregoing provisions of
this section, the Central Government may, if it is
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satisfied that the circumstances so warrant, direct
inspection of books and papers of a company by an
inspector appointed by it for the purpose.
(6) The Central Government may, having regard to
the circumstances by general or special order,
authorise any statutory authority to carry out the
inspection of books of account of a company or class
of companies.
(7) If a company fails to furnish any information or
explanation or produce any document required under
this section, the company and every officer of the
company, who is in default shall be punishable with
a fine which may extend to one lakh rupees and in
the case of a continuing failure, with an additional
fine which may extend to five hundred rupees for
every day after the first during which the failure
continues. ”
13. Section 207 deals with conduct of inspection and
enquiry by the Registrar or Inspector and Section 208 deals
with report on the inspection made which reads as under:
“208. Report on inspection made .—The Registrar
or inspector shall, after the inspection of the books
of account or an inquiry under Section 206 and other
books and papers of the company under Section
207, submit a report in writing to the Central
Government along with such documents, if any, and
such report may, if necessary, include a
recommendation that further investigation into the
affairs of the company is necessary giving his
reasons in support. ”
14.
The report submitted under Section 208 of the
Companies Act, 2013 to the Central Government may include
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a recommendation that further investigation into the offences
of the company is necessary giving reasons in support
thereof. An investigation into the affairs of the company
under various circumstances enumerated therein is
contemplated in Section 210 which is quoted hereinbelow:
“210. Investigation into affairs of company .—
(1) Where the Central Government is of the opinion,
that it is necessary to investigate into the affairs of
a company—
(a) on the receipt of a report of 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 that the affairs
of a company ought to be investigated, the Central
Government shall order an 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. ”
15. Section 212 of the Companies Act, 2013 attains
significance prominence in this case and the same envisages
as follows:
“212. Investigation into affairs of Company by
Serious Fraud Investigation Office
.—(1) Without
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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 by the Serious Fraud Investigation Office—
(a) on receipt of a report of the Registrar or
inspector under Section 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.
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(3) Where the investigation into the affairs of a
company has been assigned by the Central
Government to Serious Fraud Investigation Office, it
shall conduct the investigation in the manner and
follow the procedure provided in this Chapter; and
submit its report to the Central Government within
such period as may be specified in the order.
(4) The Director, Serious Fraud Investigation Office
shall cause the affairs of the company to be
investigated by an Investigating Officer who shall
have the power of the inspector under Section 217.
(5) The company and its officers and employees,
who are or have been in employment of the company
shall be responsible to provide all information,
explanation, documents and assistance to the
Investigating Officer as he may require for conduct
of the investigation.
(6) Notwithstanding anything contained in the Code
of Criminal Procedure, 1973 (2 of 1974), [offence
covered under Section 447] of this Act shall be
cognizable and no person accused of any offence
under those sections shall be released on bail or on
his own bond unless—
(i) the Public Prosecutor has been given an
opportunity to oppose the application for such
release; and
(ii) where the Public Prosecutor opposes the
application, the court is satisfied that there are
reasonable grounds for believing that he is not
guilty of such offence and that he is not likely
to commit any offence while on bail:
Provided that a person, who, is under the age of
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sixteen years or is a woman or is sick or infirm, may
be released on bail, if the Special Court so directs:
Provided further that the Special Court shall not take
cognizance of any offence referred to this sub-
section except upon a complaint in writing made
by—
(i) the Director, Serious Fraud Investigation
Office; or
(ii) any officer of the Central Government
authorised, by a general or special order in
writing in this behalf by that Government.
(7) The limitation on granting of bail specified in sub-
section (6) is in addition to the limitations under the
Code of Criminal Procedure, 1973 (2 of 1974) or any
other law for the time being in force on granting of
bail.
(8) If any officer not below the rank of 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 officer authorised under sub-section (8)
shall, immediately after arrest of such person under
such sub-section], forward a copy of the order,
alongwith the material in his possession, referred to
in that sub-section, to the Serious Fraud
Investigation Office in a sealed envelope, in such
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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
[Special Court or Judicial Magistrate] or a
Metropolitan Magistrate, as the case may be, having
jurisdiction:
Provided that the period of twenty-four hours shall
exclude the time necessary for the journey from the
place of arrest to the [Special Court or Magistrate's
court].
(11) The Central Government if so directs, the
Serious Fraud Investigation Office shall submit an
interim report to the Central Government.
(12) On completion of the investigation, the Serious
Fraud Investigation Office shall submit the
investigation report to the Central Government.
(13) Notwithstanding anything contained in this Act
or in any other law for the time being in force, a copy
of the investigation report may be obtained by any
person concerned by making an application in this
regard to the court.
(14) On receipt of the investigation report, the
Central Government may, after examination of the
report (and after taking such legal advice, as it may
think fit), direct the Serious Fraud Investigation
Office to initiate prosecution against the company
and its officers or employees, who are or have been
in employment of the company or any other person
directly or indirectly connected with the affairs of the
company.
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[(14-A) Where the report under sub-section (11)
or sub-section (12) states that fraud has taken
place in a company and due to such fraud any
director, key managerial personnel, other
officer of the company or any other person or
entity, has taken undue advantage or benefit,
whether in the form of any asset, property or
cash or in any other manner, the Central
Government may file an application before the
Tribunal for appropriate orders with regard to
disgorgement of such asset, property or cash
and also for holding such director, key
managerial personnel, other officer or any
other person liable personally without any
limitation of liability.]
(15) Notwithstanding anything contained in this Act
or in any other law for the time being in force, the
investigation report filed with the Special Court for
framing of charges shall be deemed to be a report
filed by a police officer under Section 173 of the Code
of Criminal Procedure, 1973 (2 of 1974).
(16) Notwithstanding anything contained in this Act,
any investigation or other action taken or initiated
by Serious Fraud Investigation Office under the
provisions of the Companies Act, 1956 (1 of 1956)
shall continue to be proceeded with under that Act
as if this Act had not been passed.
(17)(a) In case Serious Fraud Investigation Office
has been investigating any offence under this Act,
any other investigating agency, State Government,
police authority, income tax authorities having any
information or documents in respect of such offence
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shall provide all such information or documents
available with it to the Serious Fraud Investigation
Office;
(b) The Serious Fraud Investigation Office shall share
any information or documents available with it, with
any investigating agency, State Government, police
authority or income tax authorities, which may be
relevant or useful for such investigating agency,
State Government, police authority or income tax
authorities in respect of any offence or matter being
investigated or examined by it under any other law. ”
16. Section 212(1)(c) relates to investigation by the
Serious Fraud Investigation Office if the opinion of the
Central Government is based on public interest. The
impugned order dated 17-06-2025 as contained in F. No. CL-
II/18/2024-O/o DGCOA-MCA reads as follows:
“ 2. Whereas CEIB reference dated 28.1.2021
received sharing FIR registered by Delhi Police
against Kashish Developers Limited, Vinman
Constructions Private Limited and others regarding
loan of Rs.725 crores taken from DHFL by
submitting false documents and Rs.180 crores
taken from various home buyers. It is also alleged
that Mr. Sunil Chaudhary had siphoned off funds
from the company which were paid by the
homebuyers, to his personal accounts and other
companies. In the view of the above, an opinion was
formed that it is necessary to investigate into the
affairs of the companies. ”
17. What can be gathered from the afore-quoted order
dated 17-06-2025 is that an opinion has been formed by the
Central Government based on the First Information Report
registered by the Delhi Police against the petitioner-company
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and others regarding loan of Rs. 725 crores taken from DHFL
by submitting false documents and siphoning of funds from
the company by Sunil Choudhary which were deposited by
the homebuyers.
18. The scope and extent of Section 212(1)(c) of the
Companies Act, 2013 has been considered in the case of Nita
Puri v. Union of India reported in 2025 SCC OnLine Del
5941, wherein it has been held as follows:
“70. An order under section 212(1)(c) of the
Act, 2013 directing investigation by the Serious
Fraud Investigation Office is not a routine
administrative measure. It is in the nature of an
extremely serious statutory action having grave
consequences and repercussions for the subject
entities and individuals. It is therefore, imperative
that such an order must be issued only after due
application of mind, after examining all relevant
circumstances.
71. The existence of “relevant circumstances”
is sine qua non as for the purpose of formation of
opinion under section 212(1)(c) of the Act, 2013. As
held by the Supreme Court in Barium Chemicals Ltd.
v. Company Law Board [[1966] 36 Comp Cas 639
(SC); 1966 SCC OnLine SC 53; AIR 1967 SC 295.] ,
Rohtas Industries Ltd. v. S.D. Agarwal [(1969) 39
Comp Cas 781 (SC); (1969) 1 SCC 325; 1968 SCC
OnLine SC 372.] and Rampur Distillery and
Chemical Co. Ltd. v. Company Law Board [(1970) 40
Comp Cas 916 (SC); (1969) 2 SCC 774; 1969 SCC
OnLine SC 319.] , and reiterated by the Bombay
High Court in Parmeshwar Das Agarwal v.
Additional Director (Investigation) [[2016] 199 Comp
Cas 353 (Bom); 2016 SCC OnLine Bom 9276.] , the
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existence of the relevant circumstances has to be
“demonstrable”. Exercise of power under section
212(1)(c) in a casual or perfunctory manner,
seriously undermines the statutory provision itself
and the safeguards implicit thereunder. The use of
boilerplate language and/or extrapolations from
third party documents, without consideration of all
the “relevant circumstances”, reflects a disregard for
procedural propriety. It can hardly be emphasised
enough that the power under section 212(1)(c) must
be exercised with circumspection and deliberation.
In the present case, the impugned order under
section 212(1)(c) appears to have been issued in a
rather casual manner, unmindful of the statutory
pre-requisites therefor. ”
19. Mr. Amit Kumar Das, learned senior counsel for
the petitioner apart from the aforesaid judgment, has also
relied upon the case of Parmeshwar Das Agarwal v.
Additional Director (Investigation), SFIO reported in 2016
SCC OnLine Bom 9276, wherein it has been held as follows:
“47. 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
before it to the effect that the affairs of a company
ought to be investigated. Thus sub-section (1) of
section 210 confers a discretion while sub-section (2)
is mandatory in terms. By sub-section (3) and when
the Central Government orders an investigation into
the affairs of the company, it may appoint one or
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more persons as Inspectors so as to carry out this
task and to report thereon in such manner as the
Central Government may direct. By section 212 the
seventeen sub-sections thereof enable investigation
into the affairs of a company by the Serious Fraud
Investigation Office. This power is without prejudice
to the provisions of section 210. This power is to be
exercised if the Central Government is of the opinion
that it is necessary to investigate into the affairs of
a company by the SFIO. Therefore, the power to
investigate into the affairs of company is common to
both provisions. In the former there are three clauses
(a) to (c) in sub-section (1) of section 210 and the
investigation is to be carried out by the Central
Government by appointing Inspectors and there is a
discretion in that behalf. This power is stated to be
akin to section 235 of the 1956 Act. The latter
enables investigations into the affairs of a company
by the SFIO and there is one more clause (d) in sub-
section (1) of section 212 where the Central
Government can act on a request from any
Department of the Central Government or a State
Government. Therefore, in a given case there could
be an action initiated on the request of the Central
Vigilance Commission or based on its
recommendations. However, by its very title, the
investigation under section 212 by the SFIO ought to
be on the basis of the opinion of the Central
Government that it is necessary to investigate into
the affairs of the company by SFIO. That opinion has
to be based on the report of the Registrar or
Inspector under section 208 ; on intimation of a
special resolution passed by a company that its
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affairs are required to be investigated ; in the public
interest or on the request from any Department of
the Central Government or the State Government. By
section 211, the SFIO is established to investigate
frauds relating to a company. It is a very special
office and headed by a director and consists of such
number of experts from the fields enumerated in
sub-section (2) of section 211 to be appointed by the
Central Government from 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.
48. 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
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of a company in public interest. None disputes that
power or its existence. In paragraph 2 of the
impugned order, however, a reference is made to the
report of the Registrar of Companies, West Bengal,
dated January 13, 2016. We have already held that
the findings in this report are not enough for the
Central Government to exercise the drastic power.
Something more was required and to be established
as circumstances or material enough for exercise of
the power. That is clearly lacking in this case.
49. This is the only basis, namely, the report
of the Registrar of Companies, West Bengal, or its
contents which has enabled the Central Government
to exercise its powers under section 212(1)(c). It is,
therefore, apparent that it has not necessarily acted
in terms of its power conferred by section 212 to
direct investigation into the affairs of the company
in public interest. The foundation for reaching the
opinion or satisfaction is the report of the Registrar.
We have referred to the details in that report and we
are of the firm opinion that based on that the Central
Government could not have recorded a satisfaction
or an opinion that investigation into the affairs of the
company are necessary. There is no element of
public interest which is projected, save and except
some vague and general references to certain
allegations in matters of bank finance and allotment
of coal mines and alleged diversion of raw
materials. There has been absolutely no details
furnished nor referred in the report. Rather, the
report proceeds on the basis that as far as these
issues are concerned nothing can be done by the
Ministry of Corporate Affairs or the Registrar of
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Companies. We fail to understand, therefore, how in
the present facts and circumstances and based on
allegations and counter allegations between two
groups of shareholders can it be even held that it is
necessary in public interest to direct an investigation
into the affairs of the company. Once we reach the
conclusion that there is lack of requisite material to
arrive at the requisite opinion or record the
necessary satisfaction, then, in exercise of our
powers of judicial review, we can safely quash and
set aside the impugned order. We find that the
opinion recorded or the satisfaction reached is
vitiated by total non-application of mind. None of the
factors which are germane and relevant for forming
the opinion have been referred. The opinion or
satisfaction is based only on the complaint of the
Member of Parliament to the CVC and with regard to
which report was called for from the Registrar. Even
the contents of that report have been, as held above,
misread and totally misinterpreted. Based on that
no opinion could have been recorded that it is
necessary to investigate the affairs of the company
in public interest. ”
20. According to Mr. Das, the decision-making process
is of paramount significance as non-existent circumstance or
absence of relevant materials would strike at the root of any
opinion formed and this Court has the jurisdiction to
obliterate the decision itself and, in such context, reference
has been made to the case of Rampur Distillery and
Chemical Co. Ltd. v. Company Law Board reported in
(1969) 2 SCC 774 and the relevant reads thus:
“18.
But in dealing with a petition against an
order made by the Board under Section 326 of the
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Companies Act, 1956, the High Court is not
constituted a Court of Appeal over the judgment of
the Board. The Court has merely to consider
whether in arriving at its decision the Board has
restricted itself to the enquiry contemplated to be
made and has taken into consideration all the
relevant circumstances and that its decision is not
vitiated by irrelevant or extraneous matters. ”
21. Mr. Prashant Pallav, learned ASGI has referred to
the case of Adarsh Throughworks Pvt. Ltd. v. Union of
India reported in MANU/GJ/0496/2019, wherein it has been
held as follows:
“15. At this stage, it is required to be noted that
this Court has called for the original files and
carefully examined the same. The contention of the
petitioners that the respondents have not stated any
reasons why contention of the petitioners that any
material is disclosed in the affidavit and therefore
the impugned order be set aside. However, from the
decisions rendered by the Hon'ble Supreme Court in
the aforesaid cases, it can be said that while
exercising the powers under Section 212 of the Act
by the Central Government the only thing which is
required to be demonstrated prima facie is that the
objective material is available with the Central
Government for forming an opinion ordering for any
investigation by SFIO and such opinion has to be
subjective opinion which should be bona fide and
genuine. It would not be permitted to be questioned
either on the ground of propriety, reasonableness or
sufficiency. There is no necessity of giving the
details and particulars of such objective material
either in the order issued by the Central Government
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under Section 212 of the Act or even in the counter
affidavit filed by the Central Government before the
Court. This Court is of the view that whenever it is
an issue of investigation into any serious fraud, the
disclosure of the particulars of the
allegations/material upon which the allegations
have been made, may itself be contrary to public
interest and therefore if the material is disclosed, the
same may defeat the entire purpose of the
investigation itself. ”
22. A note of caution has been put to the effect that
disclosure of the particulars upon which the allegations are
made would be contrary to public interest and may defeat
the purpose of the investigation itself.
23. Reference has also been made to the case of
Sunair Hotels Ltd. v. Union of India & Ors. reported in
MANU/DE/1136/2017, wherein it has been held as follows:
“44. On a conspectus of the aforesaid decisions,
relevant paragraphs of which have been extracted
hereinabove; the following legal position emerges:
(i) Discretionary power has been conferred upon the
Central Government under the relevant provisions of
the Act, to order an investigation into the affairs of
the company;
(ii) The object of vesting such a power upon the
Central Government, under the statute, is to enable
the Central Government to assume the power to step
in where there is reason to suspect that a company
may be conducting its affairs in a manner
prejudicial to the interests of its shareholders or the
public at large;
(iii) However, the discretionary power must not be
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exercised by the Central Government, in a manner
that, by reason of misconstruction of the statute or
other reason, would lead to frustrating the object of
the statute conferring the discretion;
(iv) In order to exercise this discretion reasonably
and lawfully, the Central Government is required to
formulate an opinion that an investigation into the
affairs of the company is necessary;
(v) The opinion must be an honest opinion, rendered
after bestowing sufficient attention to the relevant
material/circumstances available before the Central
Government;
(vi) The opinion must not be based on a wholly
irrelevant or extraneous consideration;
(vii) The materials/circumstances based on which
the opinion to order an investigation has been
rendered, have to prima facie, show that the
inferences drawn from the facts in the
materials/circumstances led to conclusions of
certain definiteness. In other words, the existence of
material for formation of an opinion is a sine qua non
and the same must be prima facie demonstrable, in
case the opinion is challenged before a court of law;
(viii) The opinion formulated is not required to be a
conclusive proof of the fact that the conduct of the
affairs of the company is prejudicial to the public
interest, interest of the shareholders, members or
any other persons, or contrary to the provisions of
law;
(ix) Investigation under the relevant provisions of the
Act, is exploratory in nature, and in the nature of a
fact-finding, and must be ordered only on
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satisfactory grounds;
(x) Since investigation is an inroad into the
functioning of a company, it has to be ordered after
the facts and circumstances in the material
available with the competent authority necessitate
such an investigation;
(xi) Courts can consider the
materials/circumstances on the basis of which the
opinion to order an investigation is rendered; to
ascertain whether the facts necessitating the
investigation, in fact, existed, or whether extraneous
considerations have weighed on the opinion formed
by the Central Government; and
(xii) Whilst considering a challenge to an opinion of a
competent authority directing an investigation into
the affairs of a company, the court has to exercise
caution, inasmuch as, the court cannot sit in appeal
over the opinion and cannot substitute its opinion for
that of the competent authority of the Central
Government. ”
24. In Exalogic Solutions (P) Ltd. v. SFIO and Ors.
reported in MANU/KA/0680/2024 , it has been held as under:
“20. Section 212 completes the fulcrum of the
lis, it deals with investigation into the affairs of a
company by the SFIO, on four circumstances.
Investigation can be assigned to the SFIO — (a) on
receipt of a report of the Registrar or inspector under
Section 208, as is found in Section 210; (b) on
intimation by the company itself as is found in
Section 210; (c) in public interest which is also found
in Section 210 and what is in addition is; and (d) a
request from any Department of the Central
Government or a State Government to assign
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investigation to the SFIO. What happens once
investigation is handed over to the SFIO is also dealt
with under sub-section (2) of Section 212. Any
investigation by any agency preceding such
assignment will cease to operate. It is on the bedrock
of the aforesaid statutory frame work, the issue in
the lis needs to be considered.
24. The second submission is that no reasons
are provided to invoke Section 212 of the Act and,
therefore, it suffers from non-application of mind.
This is again unacceptable, as this Court is
projected with a problem of investigation being
handed over. At this stage, application of mind to
hand over the investigation, again in the considered
view of the court, need not form part of the said
order. The statement of objections are, in defence of
interim report necessitating assignment of
investigation. If the Union of India has thought it fit
to entrust the investigation to the SFIO, owing to
certain factors which have emerged while conduct of
investigation under Section 210 and in public
interest, this Court in exercise of its jurisdiction
under Article 226 of the Constitution of India would
not by a stroke of pen, annul such opinion of the
Union of India, unless it is contrary to the statute or
the action is demonstrably arbitrary. Neither of the
two is present in the case at hand, as the projection
of the two, by the learned Senior Counsel for the
petitioner is sans acceptance. Therefore, there is no
warrant to interfere at this stage. ”
25. In Karvy Stock Broking Ltd. v. Union of India
2020 SCC OnLine TS1048
reported in , it has been held
thus:
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“92. Before parting with the case it is to be
noticed that this court is not sitting in appeal over
the decision of the Central Government in ordering
investigation into the affairs of the company under
Section 212(1)(a) and (c) of the Act, and scope of this
court under Article 226 of the Constitution of India,
with regard to judicial review, is limited to the
examination of decision making process, and not the
decision. In the preceding paragraphs, this court, on
examining the said process, found that ROC has
followed the procedure envisaged under Section
206(4) of the Act and submitted the report; and the
said report and the order of this court, and also the
other material available on record, was examined by
the Oversight Committee, and vide its minutes dated
25.02.2020, recommended for investigation.
Eventually, the 2nd respondent, considering the
report dated 24.02.2020, and in exercise of his
jurisdiction under Section 212(1)(a) and (c) of the Act,
and forming an opinion with regard to necessity for
ordering investigation into the affairs of the
company by SFIO, ordered investigation vide the
impugned, as large public interest is involved. In
these circumstances, no exception can be taken to
the impugned order. ”
26. What emerges from the profusive judgments cited
by both the sides is that formation of an opinion by the
Central Government in terms of Section 212(1)(c) of the
Companies Act, 2013 has to be based on some material
particulars relevant for the purposes of an investigation by
the Serious Fraud Investigation Office and any non-existent
particulars would not be conducive for such investigation.
Detailed particulars with respect to the allegations in the
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opinion formed under Section 212(1)(c) would be detrimental
to public interest as well as the investigation into the offence
alleged. This Court can exercise its powers if the decision-
making process itself is flawed or fallacious.
27. Reverting back to the facts of the case, it is no
doubt true that FIR No. 0200/2020 has already been
quashed by the High Court of Delhi along with all
consequent proceedings emanating therefrom. The order of
quashment was on the basis of a settlement arrived at
between some homebuyers and the petitioner-company. The
said order does not touch upon the larger issue regarding
siphoning of funds and submission of false documents by
the petitioner-company as alleged.
28. Notwithstanding the quashment of the First
Information Report, the Central Government is not
exculpated from exercising its authority if in its opinion a
necessity has arisen to investigate into the affairs of a
company by the Serious Fraud Investigation Office. However,
the opinion formed has to be based on relevant consideration
and the application of mind while forming such opinion
needs to be replicated in the order itself. It is the case of the
petitioner-company that the counter affidavit filed by the
respondents has travelled beyond the impugned order dated
17-06-2025 which is impermissible in law in view of the
judgment in the case of Mohinder Singh Gill & Anr. v. The
Chief Election Commissioner, New Delhi & Ors. reported
in (1978) 1 SCC 405. However, a perusal of the impugned
order dated 17-06-2025 and the counter affidavit does not
reveal any significant improvement and the core issue
necessitating an investigation by the Serious Fraud
Investigation Office figures in both.
29.
The quintessence feature of Section 212 of the
Companies Act, 2013 is the formation of an opinion by the
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Central Government. The impugned order dated 17-06-2025
has been issued in exercise of the powers under Section
212(1)(c) of the Companies Act, 2013. The formation of the
opinion has been quoted above and the intrinsic feature of
such opinion is siphoning of funds and submission of false
documents while securing a loan of Rs. 725 crores from
DHFL. The opinion has been qualified by the scope of
investigation which has to be undertaken by the Serious
Fraud Investigation Office which reads as under:
“ i. to investigate the references of CEIB and FIR
under the Companies Act, 2013.
ii. to investigate the transactions amongst the
group companies, inter corporate transactions,
RPTs, loans and advances, etc.,
iii. to unearth diversion or siphoning of funds and
identify beneficiaries thereof.
iv. to investigate the loan documents, money trail
of the bank loan, flow of funds to ascertain the
actual amount of fraud involved and
persons/entities involved.
v. to investigate any other contraventions,
violations, non-compliances under the
Companies Act and other laws;
vi. any other aspects noticed during the course of
investigation. ”
30. If the impugned order dated 17-06-2025 is read in
its entirety, the same would clearly reflect cognition and
deliberation upon the allegations and the reasonings given
in the formation of opinion has been augmented by the scope
of investigation and without there being mention of the
detailed materials leading to such opinion in the order dated
17-06-2025, but at the same time, it displays the broad
spectrum, though not in so many words, based upon which
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such opinion has been formed. The existence of the
circumstances which must be “demonstratable” as held in
Nita Puri (supra) dwells in the impugned order dated
17-06-2025 and its essence is in consonance with Section
212(1)(c) of the Companies Act, 2013 and, therefore, the
same is in accordance with law.
31. Thus, in view of the discussions made hereinabove,
I am not inclined to entertain this writ application which
consequently stands dismissed.
32. Pending I.A.(s), if any, stands closed.
( Rongon Mukhopadhyay, J.)
Jharkhand High Court, Ranchi
th
Dated the 27 Day of October, 2026.
Preet/N.A.F.R.
Uploaded on: 29 /10 /2026.
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