Shree Radhe Tea Plantation ... vs Registrar Of Companies
2022 Latest Caselaw 7641 Cal

                       IN THE HIGH COURT AT CALCUTTA

                         Constitutional Writ Jurisdiction

                                 Appellate Side

Present :-

The Hon'ble Justice Moushumi Bhattacharya.


                             W.P.A 23115 of 2022
                Shree Radhe Tea Plantation Private Limited & Anr.
                                          Vs.
                   Registrar of Companies, West Bengal & Ors.


For the petitioners                   :         Mr. Abhrajit Mitra, Adv.
                                                Mr. Shaunak Mitra, Adv.
                                                Mr. Sanket Sarangi, Adv.
                                                Mr. Deepam Sarkar, Adv.
                                                Mr. Sanjiv Kr. Trivedi, Adv.
                                                Mr. Iram Hassan, Adv.
                                                Mr. Subhajit Ghosh, Adv.


For the respondents                   :         Mr. Avinash Kanakani, Adv.


Last Heard on                         :         15.11.2022.


Delivered on                          :         18.11.2022.


Moushumi Bhattacharya, J.

1. The petitioners seek an injunction restraining the respondents, namely

the Registrar of Companies, West Bengal and Regional Director, Ministry of

Corporate Affairs from taking any further steps in pursuance of an inquiry

report dated 13th April, 2021. The petitioners also seek a restraint on the

respondents from acting in pursuance of a further inquiry report issued to the

petitioners from 7th October, 2021 to 26th July, 2022.

2. The case sought to be made out by the petitioners is that the ROC

cannot initiate multiple proceedings under section 206(4) of The Companies

Act, 2013, in respect of the same alleged contraventions. Learned counsel

appearing for the petitioners places an order passed by the ROC under section

206(4) of the Act dated 4th July, 2022 pursuant to which summons were issued

on 26th July, 2022 and the petitioners attended a hearing in August, 2022.

Counsel submits that the petitioners submitted their written response dated

1st August, 2022 and 17th August, 2022 after the hearing at the office of the

inquiry officer. Counsel submits that the ROC is yet to submit a report on the

inspection under section 208 of the Act. Counsel submits that the petitioners

were made aware of the impugned inquiry report dated 13th April, 2021 only in

a winding up proceedings instituted against the petitioner no. 1 in May, 2022

before the National Company Law Tribunal (NCLT), Kolkata. It is submitted

that the report could not have been made under section 206(4) since a report

can only be made under section 208 after completion of inspection and

inquiry. It is also submitted that the Deputy ROC referred the matter to the

Income Tax Department for further course of action and for examining the

matter which is outside the purview of section 206(4) of the Act.

3. Learned counsel appearing for the respondents submits that the

proceedings before the NCLT have been instituted under section 271 of the Act,

namely for winding up of the petitioner no. 1 company. Counsel points to the

powers of the Tribunal which is hearing the of winding up proceedings and

submits that the order which was subsequently served on the petitioner dated

4th July, 2022 under section 206(4) of the Act was on the discovery of further

financial irregularities necessitating a separate proceeding under section

206(4) of the Act. Counsel submits that since the winding up proceeding is

presently being heard by the NCLT, Kolkata, the Writ Court should not

intervene and restrain the ROC from proceeding in terms of the impugned

inquiry report dated 13th April, 2021.

4. A careful perusal of the provisions relating to inspection, inquiry and

investigation of companies under sections 206-210 of the Companies Act, 2013

indicates that the sequential steps required to be taken by the ROC must be

followed before the ROC submits the report in writing to the Central

Government for further investigation into the affairs of the company if

necessary. The stage of filing a report comes only after inspection of books of

accounts or conducting inquiry under sections 206 and 207 of the Act. Section

210 is the culmination of this batch of provisions relating to inspection, inquiry

and investigation into the affairs of the company where the Central

Government may investigate into the affairs of a company if it is of the opinion

that it is necessary to do so and on fulfillment of the conditions under section

210(1)(a)-(c). To the extent of the steps taken by the respondents including the

order under section 206(4) dated 4th July, 2022, the summons issued

thereafter, the hearing given to the petitioners and the acceptance of the

petitioners' response, there is little doubt that the respondents must follow the

step-wise compliance of sections 206-210 of the Act.

5. The contention that the respondents are statutorily precluded from

initiating a proceeding under section 206(4) after the impugned inquiry report

dated 13th April, 2021 is mis-reading the relevant provisions referred to above.

Sections 206-210 of the Act do not contain a bar on the Registrar calling for

information or conducting an inspection or inquiry if the Registrar comes

across additional material warranting the second proceeding under section

206. The presumption that the impugned report dated 13th April, 2021 should

be stayed since a parallel inquiry has been initiated in July, 2022 is not borne

out from the relevant statutory provisions.

6. A significant factor would be the pendency of winding up proceedings

before the NCLT, Kolkata. Even if the contention that the petitioners came to

know of the impugned inquiry report dated 13th April, 2021 only in the course

of such proceedings is to be accepted, the petitioners have every opportunity to

contest the report as part of its defence in the winding up proceedings.

Moreover, the contention raised before this Court are purely factual in nature,

namely the time of initiation of the two proceedings and whether the said

proceeding was served on the petitioners at the material point of time. The Writ

Court is not the forum for deciding these questions particularly where the

parties are before the statutory forum which is mandated to deal with these

factual questions.

7. It is also relevant to state that the provisions for inspection, inquiry and

investigation are distinct from sections 271-273 dealing with the

circumstances in which a company may be wound up by the Tribunal. Section

273 in fact empowers the Tribunal not only to make an interim order but to

pass any other orders as it may deem fit subject to the three provisos following

section 273(1)(e) of the Act. Given the wide powers of the Tribunal under

section 273, there is no reason to hold that the petitioners would not get an

opportunity in the winding up proceedings to seek appropriate orders with

regard to the inquiry report which is impugned in the present writ petition. The

implication of a stay on the inquiry report dated 13th April, 2021 is another

factor which weighs upon this Court since the order prayed for would result in

staying of all further notices issued by the ROC which in turn would indelibly

impact the winding up proceedings.

8. This Court is hence not inclined to interfere with or interdict the

impugned inquiry report dated 13th April, 2021. It is however made clear that

the concerns raised by the petitioners on the impugned notice and the

reference/alleged delegation to another authority shall be given due

consideration by the forum where the parties are presently contesting the

winding up proceedings.

9. WPA 23115 of 2022 is accordingly dismissed without any order as to

costs.

Urgent photostat certified copies of this judgment, if applied for, be

supplied to the respective parties upon fulfillment of requisite formalities.

(Moushumi Bhattacharya, J.)