In a detailed order dismissing the petition by Shraddha Binani, daughter of Brij Binani of erstwhile Binani Cements (BCL), challenging summons issued to her last July by the Serious Fraud Investigation Office (SFIO), the Bombay High Court observed that the details sought by the investigating agency would be relevant while investigating into the affairs of the Company.
A division bench of Justices SV Gangpurwala and RN Laddha, on November 14, observed, "The details and documents sought from the Petitioner (Binani) would be relevant and related while investigating into the affairs of the Company." "The investigation into the affairs of the company would permit examination of the flow of the company’s funds into the personal accounts of Binani," said the judges.
The court also noted that the Ministry of Corporate Affairs (MCA) had initiated an investigation into the affairs of the company, relying on a forensic report as well as a report by the Resolution Professional of BCL.
Hence, the court said, it will not review facts as an appellate body nor substitute the opinion of the government.
The HC was hearing a petition filed by Binani challenging the summons issued on July 30, 2021, by SFIO contending that she was not involved in the daily affairs of the company being its non-executive director between April 2012 to April 2014.
Emphasising the fact that the SFIO had only summoned Binani, the HC said that the final investigation report is yet to be submitted to the Central government.
“The Courts would not generally interfere at the initial stage of the investigation. The investigation is carried out to unearth the alleged irregularities in the affairs of the company. The investigation is carried out by SFIO consisting of experts. In such a scenario, we do not find it a fit case to invoke the writ jurisdiction under Article 226 of the Constitution of India," it added.
The bench, however, clarified that Binani was at liberty to challenge any report that the SFIO may file with the Central government, in the event she is aggrieved by the same.
Binani's counsel had argued that under the summons, the SFIO was seeking to conduct a "roving inquiry" into her personal information/documents, which is a violation of fundamental rights.
However, the Central government had opposed the plea alleging that she had been evading summons. Mere issuance of summons under the Companies Act was part and parcel of the powers of SFIO and could not be considered a violation of fundamental rights.
The BCL was acquired by the Aditya Birla Group-owned cement company through the Corporate Insolvency Resolution Process (CIRP) in 2018 and it was renamed as UltraTech Nathdwara Cement.
