High Court Rules No Legal Right for Petitioners to Demand Reports During Investigation, Emphasizes on Uninterrupted Legal Procedures

In a significant ruling today, the High Court, led by Justice Sabyasachi Bhattacharyya, delivered a crucial judgment in the case W.P.A. 23787 of 2023, involving petitioners Aloke Chatterjee and another versus the Union of India and another. The court firmly stated that there is no legal right for the petitioners to demand the furnishing of a report under Section 208 of the Companies Act, 2013, during the ongoing investigation stage.

The petitioners had argued that the non-furnishing of the report essentially rendered the investigation a farce. However, the court observed, “at this stage, there is no occasion or legal right of the petitioners to insist upon furnishing of a copy of the report filed by the ROC under Section 208.” This statement underlines the court’s stance on the procedural norms of investigations.

The case revolved around the petitioners’ contention that the investigation against them was flawed due to the non-receipt of a report, as purportedly required under the Companies Act, 2013. They argued that this omission violated the principles of natural justice and procedural norms. However, the court highlighted that “in every pre-investigation inquiry, rights of hearing have to be incorporated on an overly inflated conception of audi alteram partem, no investigation would reach its logical culmination.”

The court’s decision was informed by a careful analysis of the Companies Act, 2013, particularly Sections 206 to 210, and relevant legal precedents. Notably, the court referenced two judgments that dealt with similar provisions but found that they did not support the petitioners’ demands for the report during the investigation phase.

Date of Decision: 16th November 2023

Aloke Chatterjee and Another VS Union of India and another