Karishma Kayal vs State Of Assam And Anr

Heard Mr. D. Das, learned senior counsel appearing for the petitioner as well as Mr. M. Phukan, learned P.P., Assam, appearing for the

State/respondent No.1 as well as Mr. D. Saikia, learned senior Advocate appearing for the respondent No.2/informant.

By filing this petition under Section 482 of the CrPC, the petitioner is assailing the legality and validity of the criminal proceedings drawn up against

her, pursuant to lodging of the FIR dated 07.03.2020, by the respondent No.2, Dr. Nivedita Barthakur Sondhi, the Chief Executive Officer of the M/s.

L.B. Group of Companies, before the SSP, CID, Kamrup (M) at Guwahati, resulting registration of CID P.S. Case No.03/2020, under Section

120B/408/420/467/477A of the IPC, dated 21.03.2020.

In support of her plea for setting aside/quashing of the FIR as well as the CID Case, the petitioner’s counsel contends that the CID has no

jurisdiction to investigate into an offence under the Companies Act, 2013 (hereinafter referred to as ‘the Act’), as the same are to be

investigated by the Serious Fraud Investigation Office, established under the provisions of the Act, as it is well settled that the extent of special law

shall prevail over the general laws. Resultantly the G.R. Case No.4396/2020, arising out of the FIR, which was registered as CID P.S. Case

No.03/2020, is liable to be quashed and set aside.

The case of the petitioner is that she was originally appointed as the Accounts Executive of a Private Limited Company, incorporated under the

provisions of the Companies Act, 1956, by the name and style of M/s. L.B. Mediservices Private Ltd., on 01.12.2015. Thereafter the petitioner was

promoted to the rank of Deputy Chief Executive Officer (Dy. CEO) and Chief Financial Officer (CFO), in the year 2018. M/s. L.B. Medi Services

Private Ltd. is a constituent of a group of companies under the name and style of “L.B. Group of Companies†and the management and

ownership of the said group is almost same, as that of M/s. L.B. Medi Services Private Ltd. The constituent companies of the L.B. Group of

Companies along with their individual line of business are as follows:

(a) L.B. Mediservices Pvt. Ltd.: Pharmaceutical Distribution.

(b) L.B. Agro Pvt. Ltd. : Recycled Paper Manufacturing.

(c) L.B. Enterprises Pvt. Ltd. : Cable Wires Manufacturing.

(d) Dihing Tea Co. Pvt. Ltd.: Tea garden and Tea factory.

The Chief Executive Officer of the M/s. L.B. Group of Companies lodged an FIR before the SSP, CID, Guwahati, on 07.03.2020, alleging inter alia

that the petitioner was working as the Chief Financial Officer (CFO) and the Deputy Chief Executive Officer (Dy. CEO) in their Group of Companies

since 28.03.2018. From 08.01.2020 to 08.02.2020, the petitioner went on leave on account of her wedding and resumed her duties from 25.02.2020.

During her leave period, the informant side came to know about several financial and procedural anomalies, mishandling of cash accounts, wrongful

disbursals of cash and payments, forgery of documents, all of which has resulted in huge financial impact on the L.B. Group of Companies. Then a

detail scrutiny was initiated by the Group of Companies, through the competent professionals and the same was continuing till lodging of the FIR.

The petitioner took decisions on day to day basis as to how much amount is to be withdrawn from various Bank Accounts and to be disbursed, for

meeting expenses. On several occasions, the petitioner fraudulently obtained the signature of the Chairperson on the cheques in the garb of petty cash

expenses by using her official capacity. After withdrawing the amount, she handed over the same to Sri Pranjal Das, Accounts Executive and Sri

Ananda Ram Boro, Office Care Assistant, to disburse the amount and keep the record thereof.

On scrutiny of the informant company, the following irregularities came into the notice, among others:

(1) As per the Audited Balance Sheet of 2019, there was an opening balance of cash in hand of Rs.7,08,961/- but as per the petty cash ledger of

01.04.2018 to 31.03.2019, there was an opening balance of cash of Rs.10,54,925/- and there was no record of utilization of the aforementioned amount

nor any proof or entry in the records, in respect of expenditure of these amounts.

(2) During April, 2019 to January, 2020, it was found that there were cash withdrawals aggregating to Rs.94,97,809/- from the company’s Bank

accounts and cash amount of Rs.19,07,610/- was received from other sources, totaling Rs.1,14,05,419/-. But on scrutiny it was found that out of the

said amount, Rs.71,29,514/- was apparently transferred to petty cashier to meet the petty cash expenditure. The balance amount of Rs.42,75,905/-

was retained in main cash books. But the petty cash disbursal register for the period 01.04.2019 to 31.01.2020 shows that out of the above mentioned

Rs.71,29,514/-, an amount of Rs.48,89,578/- is shown to be expended in the cash disbursal register for various purposes. However the authenticity and

genuineness of these expenditures was found to be doubtful and there is no whisper in the register against the balance amount of Rs.22,39,936/-,

which establishes misappropriation of the same.

(3) On scrutiny of petty cash disbursal register during the period June, 2016 to December, 2019, the accused petitioner had withdrawn an amount of

Rs.11,74,420/- in an unauthorized manner. Thus, a total amount of Rs.35,50,583/ was found to be misappropriated from petty cash sources, in the

ongoing scrutiny.

(4) The petitioner embezzled a sum of Rs.63,284/- in the name of travel expenditure.

Accordingly, giving all details of various malfunctioning by the petitioner, the Chief Executive Officer of the M/s. L.B. Group of Companies lodged

the FIR, to investigate the matter and to take necessary action, in accordance with the law. Accordingly, the CID P.S. Case No.03/2020 was

registered.

It may be noted herein that on 09.06.2020, the informant company lodged another FIR, alleging some more suspicious transactions made by the

petitioner.

Challenging the FIR pertaining to CID PS Case No. 3/2020, the present petition is filed for setting aside and quashing of the same.

Against the present petition, the informant/respondent No.2 filed her affidavit in opposition against the plea of the petitioner. Respondent No.2 in

her affidavit reiterated that the petitioner, who served in their Group of Companies in different capacities since 2015 and she was promoted to the post

of Deputy Chief Executive Officer (Dy. CEO) and Chief Financial Officer (CFO) in the year 2018, who required to undertake business transactions

and take financial decisions as the authorized representative of the company. The petitioner was on leave w.e.f 08.01.2020 to 08.02.2020 and joined in

her duty on 10.02.2020 and during her leave period, the company authority discovered certain anomalies in the financial transactions and several

fraudulent activities on the part of the petitioner, for her wrongful gain. Accordingly the FIR was lodged on 07.03.2020 and a supplementary FIR dated

09.06.2020 was lodged.

In her affidavit, the respondent No.2 denied the averments of the petitioner, made in para 22 of the petition regarding the jurisdiction of the CID to

investigate any offence related to company matters, which requires to be investigated by the Serious Fraud Investigation Officer (SFIO) under the

Act. It is contended that the offences committed by the petitioner in her individual capacity, which clearly attracts the ingredients provided in the

Indian Penal Code (in short IPC). Moreover, the other allegations against the petitioner are criminal conspiracy, criminal breach of trust, cheating,

misappropriation, falsification of accounts and forgery, which purely comes under the domain of IPC. The Companies Act, 2013, has no provision to

take action against such offences.

Moreover, the jurisdiction of the SFIO can be invoked by following the procedure provided in Section 212 of the Act. An investigation into the

affairs of the Company by the SFIO can be invoked only when the Central Government is of the opinion that it is necessary for the SFIO to

investigate. But the jurisdiction of the SFIO can be invoked only when the Registrar or Inspector, upon scrutiny of any document, filed by a company

or any information received by him is of the opinion that further information, explanation or document is required by him, based upon which the report

under Section 208 of the Act would be made. But in the instant case, as the FIR relates to certain criminal misdeeds of an employee of the company

and there is no allegation of any illegal act on the part of the company as a whole, there is no reason for invoking the provisions under the Companies

Act, 2013, and also to investigate the matter through the SFIO. Accordingly the respondent No.2/informant prayed for dismissal of the criminal

petition.

Opposing the contents made in the affidavit-in-reply by the respondent No.2/informant, the petitioner filed her affidavit. Referring to the various

Sections of the Companies Act, 2013, e.g. Section 447 and Section 211 of the said Act, the petitioner contended that when there exists a laid down

procedure for investigation of offence of fraud in relation to the affairs of a Company, investigation by any other agency is void and barred under the

Act. Further, it is well settled law that the extent of special law shall prevail over the general laws and as such the CID has no jurisdiction to

investigate the case. Accordingly, the petitioner reiterated her prayer for setting aside and quashing of the FIR, which resulted in registration of CID

P.S. Case No.03/2020.

I have heard the learned counsel for both the parties and perused the record available before me.

The prime contention raised in the present petition is whether the investigation can be carried out by the CID, in respect of the offences, alleged to

have been committed by the accused petitioner, whereas, she is an employee under the group of companies and whether the investigation of such

offences can only be conducted by Serious Fraud Investigation Office (hereinafter, in short, ‘SFIO’)?

Mr D Das, learned Senior Counsel for the petitioner, in his argument, has referred to certain provisions of the Act, in support of his contention that

the FIR registered under the different offences of the Indian Penal Code, 1860 and the investigation is without jurisdiction, hence, not maintainable and

liable to be quashed and set aside. In this regard, attention has been drawn to the provisions of Sections 143 (10), 210, 212, 435, 436, 437 of the Act.

For proper appreciation of the matter, let us discuss the above provision of law as discussed above. Section 143 of the Act provides that Auditor of

the Company shall have a right to assess the Book of Accounts and vouchers of the Company kept in the registered office of the company and also

entitled to require the same from the offices of the Company and Section 143(10) of the Act provides that Central Government may prescribe the

standard of auditing by the recommended institute of Chartered Accountants. Now, it is contended that the Company is required to audit the anomalies

in the accounts, alleged to have committed by the accused petitioner, but same is not adhered to as provided under the Act.

According to Section 210 and 212 of the Act, investigation into the affairs of the Company is to be carried by SFIO and Section 211 of the Act

provides for establishment of SFIO. For the purpose of determination of the issues raised before this Court, let us discuss the relevant provisions of the

Act, which is reproduced below.

“210. Investigation into affairs of company.â€" (1) Where the Central Government is of the opinion, that it is necessary to investigate into

the affairs of a company,â€

(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.

Establishment of Serious Fraud Investigation Office.â€

(1) The Central Government shall, by notification, establish an office to be called the Serious Fraud Investigation Office to investigate frauds

relating to a company: Provided that until the Serious Fraud Investigation Office is established under subsection (1), the Serious Fraud

Investigation Office set-up by the Central Government in terms of the Government of India Resolution No. 45011/16/2003-Adm-I, dated the

2nd July, 2003 shall be deemed to be the Serious Fraud Investigation Office for the purpose of this section.

(2) The Serious Fraud Investigation Office shall be headed by a Director and consist of such number of experts from the following fields to

be appointed by the Central Government from amongst persons of ability, integrity and experience in,â€

(i) banking;

(ii) corporate affairs;

(iii) taxation;

(iv) forensic audit;

(v) capital market;

(vi) information technology;

(vii) law; or

(viii) such other fields as may be prescribed.

3) xxx

4) xxx\

5) Xxxâ€​

How the investigation is carried out by the SFIO is prescribed by Section 212 of the Act, which reads as follows:-

Investigation into affairs of Company by Serious Fraud Investigation Office.â€

(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 by the Serious Fraud Investigation Officeâ€

(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.

(3) xxx xxx xxx

(4)xxx xxx xxx

(5)xxx xxx xxx

(6) Notwithstanding anything contained in the Code of Criminal Procedure, 1973 (2 of 1974), 1 [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 unlessâ€

(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 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 byâ€

(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. xxx xxx

xxx xxx

So far as regards the Section 435, 436 and 437 of the Act, it provides that the offences punishable under this Act, shall be triable by the Special

Court established by the Central Government and such Special Court has the jurisdiction to try offences under the Act and can also try any offence

other than the offence mentioned in the Act.

Section 447 of the Act provides for punishment for the fraud and Explanation to the Section 447 of the Act prescribes for fraud as below.

“Explanation.â€"For the purposes of this sectionâ€

(i) fraud in relation to affairs of a company or any body corporate, includes any act, omission, concealment of any fact or abuse of position committed

by any person or any other person with the connivance in any manner, with intent to deceive, to gain undue advantage from, or to injure the interests

of, the company or its shareholders or its creditors or any other person, whether or not there is any wrongful gain or wrongful loss;

(ii) wrongful gain means the gain by unlawful means of property to which the person gaining is not legally entitled;

(iii) wrongful loss means the loss by unlawful means of property to which the person losing is legally entitled.

According to the learned counsel for the petitioner, the allegation raised by the informant/Company amounts to fraud within the definition of

Section 447 of the Act and the informant/Company, without reporting the matter to the Registrar of Companies and without any resolution by the

Board, has raised the allegation of anomalies by the accused petitioner and has lodged the FIR, which has crept up into serious illegality and will cause

prejudice to the petitioner.

On the other hand, Mr D Saikia, the learned Senior Counsel for respondent No. 2, has vehemently raised objection against the contention of the

petitioner’s side that the CID has no jurisdiction to entertain the investigation. An extensive submission has been made on the overall aim and

object of the Act, that none of the offences committed by the accused petitioner will come under the purview of fraud under the Act, and the role of

SFIO is to investigate into the affairs of the Company, but not any offence committed by an employee of the Company in the individual capacity. Mr

D Saikia, learned Senior Counsel, boldly contended that the alleged conduct of the accused petitioner that she, hatching conspiracy with other

employee committed embezzlement of fund, falsification of accounts, forgery of documents, will come within the domain of Indian Penal Code, 1860,

and the definition of fraud under the Act, will not cover any of the offence alleged.

In this regard, Section 212 (6) of the Act has been referred, which prescribes the offences under the Act, which will amount to fraud under Section

447 of the Act. For ready reference, the provision is quoted below:-

“Section 212 (6): Notwithstanding anything contained in the Code of CrPC (2 of 1974), 49(Offences covered under Section 447 of this Act) shall

be cognizable and no person accused of an offence under those Section shall be released on bail or on his own bond, unlessâ€

(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 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 subsection except upon a complaint in writing made

byâ€

(iii) the Director, Serious Fraud Investigation Office; or

(iv) any officer of the Central Government authorised, by a general or special order in writing in this behalf by that Government. xxx xxx xxx xxx

substituted for the offences covered under Sub-Sections (5) and (6) of Section 7, Section 34, Section 36, Sub-Section (1) of Section 38, Sub-

Section (5) of Section 46, Sub-Section (7) of Section 56, sub-section (10) of Section 66, sub-section (5) of Section 140, sub-section (4) of Section 206,

Section 213, Section 229, sub-section (1) of Section 251, sub-section (3) of Sections 339 and Section 448, which attract the punishment for fraud

provided in Section 447 by Act 21 of 2015, S.17 (w.e.f. 29-05-2015)â€​

So far as the role & duty of the Registrar is concerned, according to Sections 206 to 209 of the Act, it envisages that the Registrar may issue

notice to the Company to call for information, inspect books and relevant documents and even can search and seize relevant documents and the entire

provision indicates that the Registrar may examine the documents concerned of the Company as a whole, but not of a private individual/the employee

of the Company. Similarly, it contends that the Section 210 of the Act speaks about the affairs of the Company, not about an individual and it is the

Central Government to decide about the necessity of investigation into the affairs of a Company through SFIO. Thus, the entire provision of the Act

relates to the affairs of the Company, not to the offence committed in private capacity, whereas, the conduct of the accused petitioner will not come

under the definition of fraud. It is submitted that as per the provision of the Act, the Company deals only with fraud under Section 447 of the Act, not

any other offence of misappropriation, forgery etc.

Attention has been drawn to the Rule as regards the function of SFIO, which carried investigation as regards the fraud by a company under the

Act and any other offence, when public interest is affected. The objective of the SFIO and the investigation that is to be carried out by SFIO is placed

before the Court, obtained from the office of SFIO, Government of India, which reveals as below: â€

xxx xxx xxx

a) The SFIO is expected to be a multi-disciplinary organisation consisting of experts in the field of accountancy, forensic auditing, law, information

technology, investigation, company law, capital market and taxation for detecting and prosecuting or recommending for prosecution white collar

crimes/frauds.

b) The SFIO will normally take up for investigation only such cases, which are characterized by â€

i) complexity and having inter-departmental and multi- disciplinary ramifications;

ii) substantial involvement of public interest to be judged by size, either in terms of monetary iii) the possibility of investigation leading to or contributing

towards a clear improvement in systems, laws or procedures.

c) The SFIO shall investigate serious cases of fraud received from Department of Company Affairs. SFIO may also take up cases on its own, subject

to para

(d) below. The SFIO would make investigations under the provisions of the Companies Act, 1956 and would also forward the investigated reports on

violations of the provisions of other acts to the concerned agencies for prosecution/appropriate action. d) Whether or not an investigation should be

taken up by the SFIO would be decided by the Director, SFIO who will be expected to record the reasons in writing. These decisions will be further

subject to review by a coordination committee.

xxx xxx xxx

As per the Companies Act, 2013 , Serious Fraud Investigation Office (SFIO) has been established through the Government of India vide

Notification NO. S.O.2005(E) dated 21.07.2015. It is a multi-disciplinary organisation under the Ministry of Corporate Affairs, consisting of experts in

the field of accountancy, forensic auditing, banking, law, information technology, investigation, company law, capital market and taxation etc. for

detecting and prosecuting or recommending for prosecution white collar crimes/frauds.

Investigation into the affairs of a company is assigned to SFIO, where Government is of the opinion that it is necessary to investigate into the affairs

of a company â€

(a) on receipt of a report of the Registrar or inspector under section 208 of the Companies Act, 2013;

(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 Governmentâ€​

What will constitute the fraud under Section 447 of the Act, is described under Section 212(6) (substituted by Act 21 of 2015). As per the

substituted provision for the offences under Section 447, the following offences are to be made out:-

“7(5) If any person furnishes any false or incorrect particulars of any information or suppresses any material information, of which he is aware in

any of the documents filed with the Registrar in relation to the registration of a company, he shall be liable for action under section 447.

(6) Without prejudice to the provisions of sub-section (5) where, at any time after the incorporation of a company, it is proved that the company has

been got incorporated by furnishing any false or incorrect information or representation or by suppressing any material fact or information in any of the

documents or declaration filed or made for incorporating such company, or by any fraudulent action, the promoters, the persons named as the first

directors of the company and the persons making declaration under clause (b) of subsection (1) shall each be liable for action under Section 447.

Criminal liability for mis-statements in prospectus.â€" Where a prospectus, issued, circulated or distributed under this Chapter, includes any

statement which is untrue or misleading in form or context in which it is included or where any inclusion or omission of any matter is likely to mislead,

every person who authorises the issue of such prospectus shall be liable under section 447: Provided that nothing in this section shall apply to a person

if he proves that such statement or omission was immaterial or that he had reasonable grounds to believe, and did up to the time of issue of the

prospectus believe, that the statement was true or the inclusion or omission was necessary.

Punishment for fraudulently inducing persons to invest money. â€" Any person who, either knowingly or recklessly makes any statement, promise

or forecast which is false, deceptive or misleading, or deliberately conceals any material facts, to induce another person to enter into, or to offer to

enter into,â€" (a) any agreement for, or with a view to, acquiring, disposing of, subscribing for, or underwriting securities; or (b) any agreement, the

purpose or the pretended purpose of which is to secure a profit to any of the parties from the yield of securities or by reference to fluctuations in the

value of securities; or (c) any agreement for, or with a view to obtaining credit facilities from any bank or financial institution, shall be liable for action

under section 447.

Punishment for personation for acquisition, etc., of securities.â€"(1) Any person whoâ€" (a) makes or abets making of an application in a fictitious

name to a company for acquiring, or subscribing for, its securities; or (b) makes or abets making of multiple applications to a company in different

names or in different combinations of his name or surname for acquiring or subscribing for its securities; or (c) otherwise induces directly or indirectly

a company to allot, or register any transfer of, securities to him, or to any other person in a fictitious name, shall be liable for action under section 447.

46 (5) If a company with intent to defraud issues a duplicate certificate of shares, the company shall be punishable with fine which shall not be less

than five times the face value of the shares involved in the issue of the duplicate certificate but which may extend to ten times the face value of such

shares or rupees ten crores whichever is higher and every officer of the company who is in default shall be liable for action under section 447.

56 (7) Without prejudice to any liability under the Depositories Act, 1996 (22 of 1996), where any depository or depository participant, with an intention

to defraud a person, has transferred shares, it shall be liable under section 447.

66 (10) If any officer of the companyâ€" (a) knowingly conceals the name of any creditor entitled to object to the reduction; (b) knowingly

misrepresents the nature or amount of the debt or claim of any creditor; or (c) abets or is privy to any such concealment or misrepresentation as

aforesaid, he shall be liable under section 447.

140 (5) Without prejudice to any action under the provisions of this Act or any other law for the time being in force, the Tribunal either suo motu or on

an application made to it by the Central Government or by any person concerned, if it is satisfied that the auditor of a company has, whether directly

or indirectly, acted in a fraudulent manner or abetted or colluded in any fraud by, or in relation to, the company or its directors or officers, it may, by

order, direct the company to change its auditors: Provided that if the application is made by the Central Government and the Tribunal is satisfied that

any change of the auditor is required, it shall within fifteen days of receipt of such application, make an order that he shall not function as an auditor

and the Central Government may appoint another auditor in his place: 92 Provided further that an auditor, whether individual or firm, against whom

final order has been passed by the Tribunal under this section shall not be eligible to be appointed as an auditor of any company for a period of five

years from the date of passing of the order and the auditor shall also be liable for action under section 447.

206 (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 subsection: 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.

Investigation into company‘s affairs in other cases.â€" The Tribunal may,â€" (a) on an application made byâ€" (i) not less than one hundred

members or members holding not less than one-tenth of the total voting power, in the case of a company having a share capital; or (ii) not less than

one-fifth of the persons on the company‘s register of members, in the case of a company having no share capital, and supported by such evidence

as may be necessary for the purpose of showing that the applicants have good reasons for seeking an order for conducting an investigation into the

affairs of the company; or (b) on an application made to it by any other person or otherwise, if it is satisfied that there are circumstances suggesting

thatâ€" (i) the business of the company is being conducted with intent to defraud its creditors, members or any other person or otherwise for a

fraudulent or unlawful purpose, or in a manner oppressive to any of its members or that the company was formed for any fraudulent or unlawful

purpose; (ii) persons concerned in the formation of the company or the management of its affairs have in connection therewith been guilty of fraud,

misfeasance or other misconduct towards the company or towards any of its members; or (iii) the members of the company have not been given all

the information with respect to its affairs which they might reasonably expect, including information relating to the calculation of the commission

payable to a managing or other director, or the manager, of the company, order, after giving a reasonable opportunity of being heard to the parties

concerned, that the affairs of the company ought to be investigated by an inspector or inspectors appointed by the Central Government and where

such an order is passed, the Central Government shall appoint one or more competent persons as inspectors to investigate into the affairs of the

company in respect of such matters and to report thereupon to it in such manner as the Central Government may direct: Provided that if after

investigation it is proved thatâ€" 134 (i) the business of the company is being conducted with intent to defraud its creditors, members or any other

persons or otherwise for a fraudulent or unlawful purpose, or that the company was formed for any fraudulent or unlawful purpose; or (ii) any person

concerned in the formation of the company or the management of its affairs have in connection therewith been guilty of fraud, then, every officer of

the company who is in default and the person or persons concerned in the formation of the company or the management of its affairs shall be

punishable for fraud in the manner as provided in section 447.

Penalty for furnishing false statement, mutilation, destruction of documents.â€" Where a person who is required to provide an explanation or

make a statement during the course of inspection, inquiry or investigation, or an officer or other employee of a company or other body corporate which

is also under investigation,â€" (a) destroys, mutilates or falsifies, or conceals or tampers or unauthorisedly removes, or is a party to the destruction,

mutilation or falsification or concealment or tampering or unauthorised removal of, documents relating to the property, assets or affairs of the company

or the body corporate; (b) makes, or is a party to the making of, a false entry in any document concerning the company or body corporate; or (c)

provides an explanation which is false or which he knows to be false, he shall be punishable for fraud in the manner as provided in section 447.

Fraudulent application for removal of name.â€" (1) Where it is found that an application by a company under sub-section (2) of section 248 has

been made with the object of evading the liabilities of the company or with the intention to deceive the creditors or to defraud any other persons, the

persons in charge of the management of the company shall, notwithstanding that the company has been notified as dissolvedâ€" (a) be jointly and

severally liable to any person or persons who had incurred loss or damage as a result of the company being notified as dissolved; and (b) be punishable

for fraud in the manner as provided in section 447

339 (3) Where any business of a company is carried on with such intent or for such purpose as is mentioned in sub-section (1), every person who was

knowingly a party to the carrying on of the business in the manner aforesaid, shall be liable for action under section 447.

Punishment for false statement.â€" Save as otherwise provided in this Act, if in any return, report, certificate, financial statement, prospectus,

statement or other document required by, or for, the purposes of any of the provisions of this Act or the rules made thereunder, any person makes a

statement,â€" (a) which is false in any material particulars, knowing it to be false; or (b) which omits any material fact, knowing it to be material, he

shall be liable under section 447.

To bolster the argument, that there is no bar to register an FIR and parallel investigation by Police, in respect of commission of cognizable offence,

and that the provision of Section 482 CrPC, for quashing the FIR and the investigation cannot be permitted, the learned Senior Counsel, Mr D Saikia,

for the respondent No. 2 has placed his reliance upon the decision of S P Gupta & Others â€"Vs-The State (NCT) Delhi & Ors.; (2005) 61 SCL 121

(Delhi), wherein it has been held that police investigation into cognizable offence cannot be ruled out in view of Section 235, 242 of the Act, as

observed by Hon’ble Apex Court in Ram Das Motor Transport Ltd. & Ors. â€"Vs- Tadi Adhinarayana Reddy & Ors.; reported in (1997) 5 SCC

The provision of Section 235 to 242 of the Act do not create bar against the investigation by Police Officer, if cognizable offence punishable

under IPC is committed in the affairs of the Company. It was further held that power under Section 482 CrPC is to be exercised sparingly, but not to

minutely examine the veracity/truthfulness of the evidence and while the investigation is in progress, the same cannot be liable to be quashed. The

Hon’ble Court further observed that Police is obliged to carry out the investigation, either on complaint of any citizen or under orders from the

Court and to register a case.

The learned Senior Counsel, Mr D Saikia also placed reliance upon the decision of Bombay High Court, in Manish Rangari & Ors. â€"Vs- Union

of India & Ors.; 2020 SCC Online Bom 226, wherein in para â€" 7 (b), it has been held that:-

“7 (b) As per Section 212(2) of the 2013 Act, prima facie it is seen that the SFIO has jurisdiction to investigate offence under the said Act only.

Hence, the SFIO’s investigation and subsequent complaint for offences under the Penal Code, 1860 and under the 1956 Act, prima facie appears

to be without jurisdiction. A contrary interpretation would permit the SFIO to encroach upon investigating powers of other investigating agencies under

other laws, which cannot be the intention of the legislature.

It has been submitted that as a persuasive measure, such an observation can also be looked into although the same is not binding upon this Court.

The learned Public Prosecutor for the State Respondent, Mr. M. Phukan, has also raised serious objection against the prayer made in the present

petition and adopting the argument of the learned counsel for the private respondent No. 2 has submitted that it is not a fit case to invoke the provision

of Section 482 CrPC. Attention has also been drawn to certain other persons, who were also involved along with the petitioner with the alleged

offence and interim stay order has affected the entire process of investigation and accordingly, has prayed for dismissing the present petition and to

vacate the interim order.

In view of the above provision, it is now necessary to examine the allegation in the present FIR. Undisputedly, the petitioner, herein, was working

as an employee under the informant/Company and her personal conduct as an employee, has been challenged and the prime allegation is that while

performing her duty, she has falsified the accounts by forging the documents, misappropriated the money of the informant/ Company and forged large

number of documents of the Company, while withdrawing money from the Company’s bank account and also received cash amount totaling Rs.

1,14,05,419 (Rupees One Crore Fourteen Lacs Five Thousand Four Hundred Nineteen) etc. etc. (for the sake of brevity, entire matter is not

reflected). The offence alleged to have been committed by the petitioner with conspiracy with other co-employee(s) and accordingly, a case was

registered under Sections 120(B)/408/420/467/477AIPC, and all such offences alleged to have been done in personal capacity and none of the offence

will come under the purview of Section 447 (fraud) as defined under the Companies Act, 2013. The SFIO undertook the investigation of serious fraud

under the Companies Act, 2013 into the affairs of the company as entrusted by the Central Government, not at the behest of a private person. As has

been held by the Hon’ble Supreme Court in Ram Das Motor Transport (supra), the Companies Act, 1956 provides for dealing with grievances

against the Company and its Board of Directors. A specific procedure has been laid down under the Companies Act, 2013, for launching prosecution

under the Act and how the investigation is to be carried out and SFIO has no role and scope to enquire into the offences committed by an individual

under the Company. The object of establishment of SFIO clearly indicates its functions, scope and ambit, which is much broader than inquiry of a

private individual.

In view of the above findings and discussions made above, there appears no illegality in registering the case by the CID and the provision under

Section 212 (2) of the Companies Act, 2013 (which has already been mentioned above) has not denuded the investigation carried by any other agency,

apart from SFIO. As has been contended in the present petition that there being alternative recourse to investigate into the affairs of the Company by

the SFIO, the CID has no jurisdiction to try the offence, will hold no good and it is answered accordingly.

The exercise of inherent power under Section 482 CrPC is in exception, but not a rule and it is to be applied with circumspection in exceptional

cases only to prevent the abuse of law and to prevent the miscarriage of justice. Challenge to the FIR in the present case being entirely related to the

relevant provision of law as has been discussed above, which has been suitably resisted by the counterpart, there remains no scope to accept the

contention that has been raised.

Resultantly, petition has no merit and stands dismissed.

Interim order passed earlier stands vacated so that investigation can proceed as per law.