Facts:

The petitioners have filed a writ petition challenging the Registrar of Companies' (ROC) ability to initiate multiple/parallel proceedings under Section 206 of the Companies.

The petitioners seek an injunction preventing the respondents, namely the West Bengal Registrar of Companies and the Regional Director of the Ministry of Corporate Affairs, from taking any further action in response to an inquiry report dated April 13, 2021. The petitioners also request that the two respondents refrain from acting in accordance with a further inquiry report issued to them from October 7, 2021 to July 26, 2022.

Petitioner's contentions:

The petitioners' contention is that the ROC cannot initiate multiple proceedings under section 206(4) of The Companies Act, 2013, for the same alleged violations.

The ROC has yet to submit a report on the inspection conducted in accordance with Section 208 of the Act. The petitioners were only made aware of the contested inquiry report dated April 13, 2021 during a winding up proceeding initiated against petitioner no. 1 in May 2022 before the National Company Law Tribunal (NCLT), Kolkata.

The report could not have been made under section 206(4) because a report under section 208 can only be made after the inspection and inquiry are completed. The Deputy ROC referred the matter to the Income Tax Department for further action and investigation, which is not covered by section 206(4) of the Act.

Respondent's contentions:

 The proceedings before the NCLT were initiated under section 271 of the Act, namely for the winding up of the petitioner no. 1 company. The order, which was later served on the petitioner on July 4, 2022, was based on the discovery of additional financial irregularities, necessitating a separate proceeding under section 206(4) of the Act. The Writ Court should not intervene and restrain the ROC from proceeding in accordance with the impugned inquiry report dated 13th April, 2021, because the winding up proceeding is currently being heard by the NCLT, Kolkata.

Judgement:

The respondents' contention that they are statutorily barred from initiating a proceeding under section 206(4) after the impugned inquiry report dated April 13, 2021 is based on a misreading of the relevant provisions referred to above. Sections 206-210 of the Act do not prohibit the Registrar from requesting information or conducting an inspection or inquiry if the Registrar discovers additional evidence warranting the second proceeding under section 206.

In fact, Section 273 empowers the Tribunal not only to make an interim order, but also to make any other orders it deems appropriate, subject to the three provisos that follow Section 273(1)(e) of the Act. Given the Tribunal's broad powers under Section 273, there is no reason to believe that the petitioners would not be able to seek appropriate orders with regard to the inquiry report at issue in the current writ petition during the winding up proceedings. Another factor weighing on this Court is the implication of a stay on the inquiry report dated 13th April, 2021, because the order prayed for would result in a stay of all further notices issued by the ROC, which would have an indelible impact on the winding up proceedings.

Writ petition is accordingly dismissed.