Gujarat High Court
M/S Electrotherm (India) Limited vs Union Of India on 23 June, 2021
Author: Ashutosh J. Shastri
Bench: Ashutosh J. Shastri
C/SCA/8500/2021 ORDER DATED: 23/06/2021
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/SPECIAL CIVIL APPLICATION NO. 8500 of 2021
==========================================================
M/S ELECTROTHERM (INDIA) LIMITED
Versus
UNION OF INDIA
==========================================================
Appearance:
MR SN SOPARKAR, SR. ADVOCATE with MR. JAIMIN R DAVE(7022) for
the Petitioner(s) No. 1,2
MS HIRVA R DAVE(10742) for the Petitioner(s) No. 1,2
for the Respondent(s) No. 1,2
==========================================================
CORAM:HONOURABLE MR. JUSTICE ASHUTOSH J. SHASTRI
Date : 23/06/2021
ORAL ORDER
1. The present petition under Articles 226 and 227 of the Constitution of India is filed for the purpose of seeking the following reliefs :-
"9(a) Your Lordships may be pleased to call for the records and proceedings in respect of the proceedings relating to the investigation ordered by the respondents and after going through the same, to quash and set aside the order dated 24.12.2019 and 24.12.2020 passed under Section 210 of the Companies Act, 2013 annexed at Annexure-A to this petition;
(b) pending, admission, hearing and final disposal of this petition, this Hon'ble Court may kindly be pleased to stay and suspend operation and implementation of impugned order dated 24.12.2019 and 24.12.2020 passed under Section 210 of the Companies Act, 2013 annexed at Annexure-A to this petition;
(c ) Any other and further relief, which is just and proper, may kindly be granted as may be deemed expedient by this Hon'ble Court in the facts and circumstances of the case.
Page 1 of 8 Downloaded on : Tue Sep 07 08:50:35 IST 2021 C/SCA/8500/2021 ORDER DATED: 23/06/2021
(d) ......."
2. By way of attaching bulky record to the petition, the petitioners tried to raise a grievance with regard to an investigation which is sought to be undertaken by the authority pursuant to the order impugned in the petition. Learned Senior Advocate Mr. S.N. Soparkar, appearing with Mr. Jaimin R. Dave, learned advocate for the petitioners has contended that the order in question is passed with mala fide exercise of power and without proper application of mind. It has been further submitted that the order in question is passed without assigning any cogent reasons nor based upon material having been disclosed to arrive at a subjective satisfaction. Learned Senior Advocate Mr. Soparkar after referring to the decision of the Apex Court in the case of The Barium Chemicals Ltd. And Anr vs The Company Law Board And Others reported in 1967 SC 295 has submitted that before passing the impugned order, opinion will have to be formed by the authority and thereafter only powers can be exercised and to substantiate this contention, learned Senior Advocate Mr. Soparkar has submitted that there is a inter se family feud in the management and affairs of the Company, which has resulted into series of litigation inter-se. The first proceedings have been initiated way back in September, 2018 before NCLT whereas, second litigation was generated by alleging operations of mismanagement in the month of April, 2019. Having not materialized in aim for putting trouble upon the petitioners, third litigation was filed in the form of writ petition in the month of September, 2019 and then in November, 2019 having been withdrawn the said petition before NCLT, a further litigation came to be generated again and so various frivolous petitions were filed in one or the other form and therefore, looking to all these sequence of events, it is nothing, but a mere family feud which ought not to have ignored by the authority. Learned Senior Advocate Mr. Soparkar has further submitted that Page 2 of 8 Downloaded on : Tue Sep 07 08:50:35 IST 2021 C/SCA/8500/2021 ORDER DATED: 23/06/2021 this inter se controversy has resulted into filing of so many criminal proceedings, approximately 40 in numbers and though investigation has been under taken by the government agency, the said investigation is not yet concluded and, therefore, by mentioning this series of litigation, a contention is raised that the order in question deserves to be quashed.
2.1. Learned Senior Advocate Mr. Soparkar has further submitted that the earlier investigation which has been undertaken as stated above somewhere in the month of June, 2019, pursuant to which, even the show cause notice came to be issued which has been replied and the proceedings are yet not finalized and, therefore, so long as the said proceedings are not concluded, it is not open for ordering the second investigation and, as such, there is an exercise of jurisdiction actuated with mala fides and hence, has requested to exercise extra ordinary jurisdiction. No other submissions have been made.
3. However, the record indicates that this controversy in question is entangling in series of litigation and further what has been asked for from the petitioners is merely to keep the record ready so that proper investigation which has been ordered pursuant to the recommendations to see affairs of the Company in the public interest can be effectively undertaken and, therefore, when the authority has come to the conclusion, on the basis of various issues and allegations, with regard to the affairs of the Company in the larger public interest, this Court would not like to dwell into all these serious disputed questions of fact which may thwart the investigation in any manner.
3.1. It further appears from the record that even the petitioners themselves initially have shown willingness to supply everything which has been sought for and for that purpose thirty days time was Page 3 of 8 Downloaded on : Tue Sep 07 08:50:35 IST 2021 C/SCA/8500/2021 ORDER DATED: 23/06/2021 prayed for vide communication dated 27.01.2021 and thereafter, a further time has also been sought for furnishing information to satisfy or to respond to the query which may be put upon the petitioners. It appears from the record that except taking time, no concrete response is given to the authorities, which recommended investigation and, therefore, such circumstances prevailing on record as reflecting even from the list of events and the averments, this Court is of the clear opinion that at this stage when the investigation is sought to be undertaken, no interference is called for. Simply because on account of family feud and on account of series of litigation inter se, a contention is raised with regard to the mala fide, the Court cannot interfere with on basis of bald assertions. In fact, the Oversight Committee in its meeting held on 22.11.2019 has considered various issues/allegations in the matter of Electortherm India Limited and when the said Committee has recommended investigation into the affairs of the said Company through RD (NWR) in the larger public interest, it is not for this Court to just exercise extra ordinary jurisdiction, which may result into derailing the process of said investigation. Considering the aforesaid circumstances, it is not possible for this Court to digest that on account of series of litigation, the authority who is an independent authority has actuated and passed the order with any mala fide intent. At this stage, when the Oversight Committee, has deliberated, examined the issue and recommended the investigation with full particulars, to arrive at such subjective satisfaction may not be reflected at length in the order in question. Since a conscious decision is taken in the public interest, the submissions made by the learned senior advocate Mr. Soparkar are devoid of merit.
4. The Court is also of the opinion that the scope of judicial review is not to be construed to mean that in every action, the Court Page 4 of 8 Downloaded on : Tue Sep 07 08:50:35 IST 2021 C/SCA/8500/2021 ORDER DATED: 23/06/2021 has to intervene. This record itself is sufficient enough to indicate that affairs of the company since are ordered to be investigated properly in the larger public interest, no interference deserves in any form. Hence, this Court is not inclined to exercise any extra ordinary jurisdiction.
4.1. In addition to this, the issue about disputed question of fact and controversy related to affairs of the Company, the Court is of the opinion that let the independent authority be permitted to act in accordance with law, instead of arriving at a conclusion on hyper technicality at the elementary stage of investigation when it is ordered, the Court is not inclined to exercise jurisdiction, no doubt, the learned Senior Advocate has tried to rely upon the decision of the Apex Court as referred above, but here is a case in which a conscious decision is taken after considering various issues by the Oversight Committee in its meeting dated 27.11.2019 and when series of inter-se litigation are pending, the matter deserves investigation and, therefore, it cannot be said in ipse dixit manner, just for the sake of ordering, an investigation is ordered. Hence, the Court is of the opinion that no interference is required.
5. At this stage, the Court is also posted with few documents across the hearing in the form of draft amendment, but the same are submitted after pointing out certain contentions at the end, but looking at one of the communication dated 18.06.2020, the Court is also of the opinion that when the government of India has specifically directed investigation of books of accounts and other record of the Company in view of Section 210(1) (c) of the Companies Act and it has been indicated that the same will be carried out on 07.07.2021, so at this stage of the proceedings, no interference deserves, keeping in view this peculiar background of facts.
Page 5 of 8 Downloaded on : Tue Sep 07 08:50:35 IST 2021C/SCA/8500/2021 ORDER DATED: 23/06/2021 5.1. Additionally, the Court is mindful of the scope of judicial review to interfere in the executive action, the proposition laid down by the Apex Court in the decision in the case of State of Uttar Pradesh & Ors., v. Rakesh Kumar Keshari & Anr., reported in (2011) 5 SCC 341 since considered, the relevant observations contained therein are reproduced hereunder :-
"29. This Court in Johri Mal case, also held that the decisions and actions which do not have adjudicative disposition would not strictly fall for consideration before a judicial review court. According to this Court the limited scope of judicial review is
(i) Courts, while exercising the power of judicial review, do not sit in an appeal over the decisions of administrative bodies
(ii) A petition for judicial review would lie only on certain well defined grounds
(iii) An order passed by an administrative authority exercising discretion vested in it, cannot be interfered in judicial review unless it is shown that exercise of discretion itself was perverse or illegal
(iv) A mere wrong decision without anything more is not enough to attract the power of judicial review
(v) The supervisory jurisdiction conferred on a Court is limited to seeing that the Tribunal functions within the limits of its authority and that its decisions do not occasion miscarriage of justice and
(vi) the Court shall not ordinarily interfere with a policy decision of the State."
5.2. It is settled position of law by catena of decisions that constitutional Court while exercising their power of judicial review would not assume the role of the authority since the judicial review is not analogous to venture into the merit of the case like an authority Page 6 of 8 Downloaded on : Tue Sep 07 08:50:35 IST 2021 C/SCA/8500/2021 ORDER DATED: 23/06/2021 and as such, in absence of any manifest injustice or violation of the principles of natural justice or any error of law, this Court is not in a position to embark upon the authorities discretion which is vested in a statute and, hence, this is not a fit case in the considered opinion of this Court to exercise extra ordinary jurisdiction
6. So far as the issue with regard to disputed questions of fact, it is settled position of law that whenever there are seriously disputed questions of fact and determination is based on analysis of several documents, normally such disputed version is not to be examined by the Court in exercise of jurisdiction under Article 226 of the Constitution of India. For this purpose, the Court is mindful of the decision which is delivered by the Apex Court in the case of Orissa Agro Industries Corpn. Ltd. v. Bharati Industries & Ors., reported in (2005) 12 SCC 725. The relevant observations contained in para 8 reads as under :-
"8. In a catena of cases, this Court has held that where the dispute revolves round questions of fact, the matter ought not to be entertained under Article 226 of the Constitution. (State Bank of India v. State Bank of India Canteen Employees' Union and Chairman, Grid Corpn. Of Orissa Ltd., (GRIDCO) v. Sukamani Das.)."
6.1. Yet another decision on the issue delivered by the Apex Court in the case of New Okhla Industrial Development Authority v. Kendriya Karamchari Sahakari Grih Nirman Samiti reported in (2006) 9 SCC 524, and therefore, keeping in view this aforesaid circumstance, recorded in para 13, it is not desirable to undertake such exercise as to whether it is a family feud which has resulted into such kind of action by the authority or the alleged mala fides which are on the basis of such voluminous documents, this Court is not inclined to undertake such exercise especially when the statutory Page 7 of 8 Downloaded on : Tue Sep 07 08:50:35 IST 2021 C/SCA/8500/2021 ORDER DATED: 23/06/2021 authorities are empowered to determine such issues. The said para 13 reads as under :
"13. In a petition under Article 226, the High Court has jurisdiction to try issues both of fact and law. When the petition raises complex questions of fact which may, for their determination, require oral evidence to be taken and not be appropriately tried in a writ petition, the High Court should ordinarily declined to try the petition."
7. From the aforesaid proposition as well as from the peculiar background of facts, it appears to this Court that no extra ordinary circumstance is pointed out which may point out the Court to interfere. Hence, the petition being devoid of merit, stands dismissed.
(ASHUTOSH J. SHASTRI, J) phalguni Page 8 of 8 Downloaded on : Tue Sep 07 08:50:35 IST 2021