The Serious Fraud Investigation Office has the authority to investigate under the Companies Act without prior approval under Section 219, and it may also investigate offences under the IPC as per the relevant provisions.

JUDGMENT

Amit Sharma, J. - The present petition under Article 226 of the Constitution of India read with Section 482 of the Code of Criminal Procedure, 1973 ('CrPC') seeks the following prayers:

i. Quash/set aside the Investigation Report dated 06.05.2022 submitted by respondent no. 2/Serious Fraud Investigation Office titled 'Investigation Report of Bhushan Power & Steel Limited & Others' and all consequent proceedings emanating therefrom.

ii. Quash/set aside sanction letter dated 19.05.2022, i.e., F.No. LEGAL-35/15/2022 issued by respondent no. 1/Ministry of Corporate Affairs granting sanction to the Serious Fraud Investigation Office for initiating Prosecution.

iii. Quash the complaint dated 19.05.2022 filed by the Serious Fraud Investigation Office before the Court of the learned Additional Sessions Judge - 03 and Special Judge (Companies Act), Dwarka District Courts, Delhi.

iv. Set aside summoning order dated 20.09.2022 passed by the learned Special Judge in CC No. 374/2022 titled 'SFIO v. Bhushan Airways Services Private Limited and Others'.

v. Restrain the Serious Fraud Investigation Office from carrying out any further investigation into the affairs of Bhushan Power and Steel Ltd. ('BPSL') and Others under order F.No. 5/5/2016-CL-II dated 03.05.2016 issued by the Ministry of Corporate Affairs.

Background

2. Briefly stated, the facts of the present case, necessary for adjudication of the present petition, are as under:

i. Respondent no. 1/Ministry of Corporate Affairs ('MCA'), in exercise of powers under Section 212(1)(c) of the Companies Act, 2013 ('the Act'), vide F.No. 5/5/2016-CL-II dated 03.05.2016 ordered an investigation into the affairs of 15 companies named in the said order.

ii. Vide orders dated 12.05.2016, 30.08.2019, 31.12.2020 and 28.10.2021, respondent no. 2/Serious Fraud Investigation Office ('SFIO'), appointed/notified a team of inspectors to carry out the investigation.

iii. During the course of investigation, in view of the order dated 03.05.2016, the SFIO, vide its letter dated 27.12.2017 sought approval for investigation into the affairs of 20 additional companies, in terms of Section 219(c) of the Act. In addition to the above, the SFIO also sought approval to investigate the affairs of 46 other companies.

iv. On 08.01.2018, the MCA, authorized inspectors of the SFIO to investigate into the affairs of all the aforesaid 66 companies, as sought by the SFIO.

v. On 06.05.2022, the SFIO submitted its Investigation Report under Section 212(12) of the Act titled 'Investigation Report of Bhushan Power & Steel Limited & Others'.

vi. On 19.05.2022, the MCA issued a sanction letter, directing the SFIO to initiate prosecution against the petitioners for commission of offences under the Act.

vii. On the same day, i.e., on 19.05.2022, the SFIO filed a complaint, i.e., CC No. 374/2022 titled 'Serious Fraud Investigation Office v. Bhushan Airways Services Pvt. Ltd.' before the Court of the learned Additional Sessions Judge - 03 and Special Judge (Companies Act), Dwarka District Courts, Delhi.

viii. In the said complaint, petitioner no. 1/R.K. Gupta was arrayed as accused no. 45 for commission of offences under Sections 447, 36(c), 448 read with Sections 447 and 129 of the Companies Act; Sections 417, 420, 120B of the Indian Penal Code, 1860 ('IPC') and Section 211 read with Section 628 of the Companies Act. Petitioner no. 2/Silver-Star Commercial Company Pvt. Ltd. was arrayed as accused no. 34 for commission of offence under Section 447 of the Companies Act. Petitioner no. 3/Decor Investment and Finance Pvt. Ltd. was arrayed as accused no. 13 for commission of offences under Sections 417, 420, 120B of the IPC and Section 447 of the Companies Act.

ix. On 20.09.2022, the learned Special Judge took cognizance on the aforesaid complaint and issued summons to the petitioners.

Submissions on behalf of the Petitioners

No Jurisdiction