The Delhi High Court has observed that the investigation-related material and orders of Ministry of Corporate Affairs' (MCA) cannot be disclosed at the preliminary stage of an ongoing Serious Fraud Investigation Office (SFIO) probe.

Justice Swarana Kanta Sharma held that such disclosure could prejudice the investigation and connected proceedings.

The Court dismissed a petition filed by Mandke Foundation, seeking copies of MCA orders directing an SFIO investigation into the affairs of Reliance Home Finance Limited, Reliance Communications Limited and other companies.

The Foundation is engaged in charitable activities by running the Kokilaben Dhirubhai Ambani Hospital and Medical Research Institute at Mumbai.

It contended that despite being required to furnish extensive financial records and participate in the investigation, it had not been supplied with the MCA orders authorising the probe.

It was argued that withholding the orders deprived the Foundation of the ability to understand the scope of the investigation and exercise its legal remedies.

Dismissing he plea, Justice Sharma noted that the SFIO proceedings were still at a preliminary stage and that the Foundation had merely been called upon to furnish information under Section 217 of the Companies Act.

“Therefore, it cannot be said that the petitioner was left completely unaware of the nature or purpose of the information sought, inasmuch as the notice itself discloses that the information has been sought in connection with an ongoing investigation into the affairs of the aforenoted companies under investigation, and that the petitioner is being called upon to furnish documents in view of its financial transactions with such companies. The petitioner was also informed of the categories of documents required to be produced, including the relevant financial records and bank account statements for the period specified in the notice,” the Court said.

It further noted that the Foundation had failed to provide the information sought even after receiving a reminder from the SFIO, following which summons were issued to its present and former directors.

Further, the Court held that the investigation involved several companies and that proceedings arising out of the same investigation were also pending before the Bombay High Court.

It noted that the MCA orders contained sensitive information and that directing their disclosure, along with the underlying material, at the present stage could adversely affect the ongoing investigation and connected proceedings.

Holding that no enforceable right had accrued in favour of the Foundation at the preliminary stage of the investigation, the Court said:

“…no enforceable right has been made out by the petitioner to seek disclosure of the MCA Orders and the underlying material at this preliminary stage of the investigation. Needless to state, if at any subsequent stage any action prejudicial to the petitioner is taken, it shall be open to the petitioner to avail of such remedies as may be available in law and raise all contentions permissible in accordance with law.”

Title: MANDKE FOUNDATION v. UNION OF INDIA & ANR

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