Court confirms that the assignment of investigation to the Serious Fraud Investigation Office under Section 212 can occur regardless of ongoing inquiries under Section 210, without violating principles of natural justice.

ORDER :

The petitioner is before this Court seeking a direction to call for records and quash order dated 31-01-2024 passed by the 1st respondent/Director, Serious Fraud Investigation Office (‘SFIO’ for short).

2. Shorn of unnecessary details, facts in brief, as borne out from the pleadings, are as follows:

The petitioner claims to be a one person company incorporated in the year 2014, under the provisions of the COMPANIES ACT , 2013 (‘the Act’ for short) with the Registrar of Companies, Bangalore (hereinafter referred to as ‘the Registrar’ for short). The petitioner, is represented through its Director – Share Holder. On 28-07-2020, the 2nd respondent/Ministry of Corporate Affairs, Union of India addressed a communication to the petitioner/Company observing that a complaint has been received by it in respect of certain alleged incorrect address mentioned in Form No.10 filed by the petitioner/Company with Registrar. The communication never reached the petitioner. A show cause notice also comes to be issued against the petitioner, invoking Section 12 of the Act for the alleged non-maintenance of the registered office at the address mentioned in Form No.10 filed before the Registrar. The petitioner appears to have given its reply contending that owing to COVID-19 pandemic engulfing the nation, the Company began to work from home and, therefore, the registered office of the petitioner had been shifted. This results in another notice dated 19-08-2020 issued by the Registrar directing the petitioner to file adjudication application under Section 454 of the Act for the alleged non-maintenance of the office. The petitioner then submits an adjudication application before the Registrar who initiates adjudication proceedings against the petitioner for the alleged violation under Section 12 of the Act, with regard to non-intimation of change in address of the registered office as mandated under Section 12 (4) of the Act. An order was later passed on 09-02-2021 imposing a penalty of Rs.1,00,000/-each on the petitioner and the Director for the alleged violation of Section 12 of the Act. The petitioner prefers an appeal against the said order, which results in reduction of the amount of penalty to Rs.20,000/-. The issue in the subject lis does not concern the aforesaid proceedings initiated under Section 12 of the Act.

3. On 29-01-2021 the Registrar addresses a communication of enquiry under Section 206 of the Act to the petitioner in respect of certain transactions between the petitioner and another company in the name and style of ‘Cochin Minerals and Rutile Limited’ (‘CMRL’ for short). The petitioner was directed in the communication to furnish various documents and details and annual reports, audited bank statements for the years 2014-15 to 2019-20 of the transactions of the aforesaid Companies. The petitioner, in response to the said communication, is said to have furnished all the documents sought for, which results in another communication being issued by the Registrar alleging that the copy of the trial balance furnished by the petitioner was not proper and further directed submission of several documents. It is said that the petitioner has from time to time furnished all the documents that were being sought by the Registrar through several communications.

4. On 24-06-2022, the Registrar issues a notice directing the petitioner to appear in person at the office of the Registrar. The petitioner is said to have represented through various representations along with all the documents and clarifications after which the Registrar