ORDER
S.K. Seth, J.
1. This writ petition is directed against the Order dated 16-12-2003 (Ann. P-2) and the Summons dated 2-1-2004 (Ann. P-3). Order dated 16-12-2003 on behalf of the Central Government has been passed by respondent No. 2 under Section 235(1) of the Companies Act, 1956 (hereinafter referred to as ‘Act’) ordering investigation by respondent No. 3 into the affairs of the petitioner company. In order to carry out investigation, respondent No. 3 has issued summons to the Principal Officer of the petitioner company to produce Books of Account and other documents and papers and as well as to give evidence from 7-1-2004 to 9-1-2004.
2. Facts lie in a narrow compass. Petitioner is a company registered under the provisions of the Act. It is alleged that without there being any report of the Registrar of Companies (hereinafter referred to as ‘RoC’) the order dated 16-10-2003 P-2 has been issued which is per se illegal, without jurisdiction, and as such unsustainable in law. Alternatively, it is urged that if there is any report of RoC as contemplated under Section 234(6) of the Act, then it has been obtained behind the petitioner’s back without seeking any information or explanation and as such, it is arbitrary and deserves to be quashed by appropriate writ. It was also urged that respondent No. 3 is making roving enquiry on the strength of vague summons, which is impermissible. However, this contention was given up at the time of argument in view of annexure P-4 issued by the Investigator-respondent No. 3. It is contended that without seeking explanation or information, RoC cannot prepare report contemplated under Section 234(6) of the Act consequently; the investigation ordered against the petitioner is bad in law. Second submission was that petitioner is entitled to have the copy of report as well as an opportunity of prior hearing and without that petitioner is handicapped and cannot effectively defend itself in the investigation. It was also contended that during investigation petitioner or its principal officer under Section 240 of the Act can be compelled to give evidence against it which is contrary to law. These are the contentions that have been advanced by Shri Vijay Asudani, learned counsel for the petitioner at the time of hearing. He also placed reliance on the following decisions in Rohtas Industries Ltd. v. S.D. Agarwal , Sri Ramdas Motor Transport Ltd. v. Tadi Adhiriayana Reddy and Badri Prasad Chikwa v. State of M.P. .
3. Per contra, Shri T.N. Singh learned counsel appearing for respondents submitted that Order dated 16-12-2003 has been passed under Section 235(1) of the Act on the report of RoC, and RoC is not required to seek explanation or information for preparing report. According to him, under Section 234(1) of the Act report can also be prepared on the subjective satisfaction based upon document filed under the provisions of the Act. He further contended that subjective satisfaction is not open to review. Shri Singh also submitted that before passing an order under Section 235(1) of the Act, the respondents are not under any legal obligation to furnish the report. Investigation is purely a fact-finding enquiry and there is no Its between the respondents and the petitioner company. It is only after the Investigator submits the report the Central Government is required to forward the report under Section 241(2) of the Act. Shri Singh in support of his contentions placed reliance on the decision of Supreme Court in Union of India v. W.N. Chadha and two decisions of Bombay and Madras High Courts in Narayanlal Bansilal v. Maneck Phirose Mistry and Coimbatore Spg. and Wvg. Ltd. v. MS. Shrinivasan .
4. After having heard learned counsel for parties at length and going through the material available on record, in the considered opinion of this Court, there is no merit and substance in the submissions of learned counsel for petitioner and the writ petition being devoid of substance deserves to be dismissed.
5. While dealing with the rival submissions, one has to bear in mind that both, Sections 234 and 235 of the Act fall under Part VI of the Act. Part VI of the Act deals with the Management and Administration of companies registered under the Act. Various sections falling under part VI of the Act enjoin upon a company governed by the Act to furnish documents and information to the RoC. For example, Section 146 of the Act casts a statutory duty to furnish to RoC the situation of the registered office of the company within thirty days of incorporation; Section 149 of the Act puts restriction on commencement of business of company where a company having share capital has issued prospectus inviting public to subscribe to shares or exercise any power of borrowing unless a duly verified declaration by a Director or the Secretary is filed with RoC under Section 149(1)(d) or Section 149(2)(c) and Section 149(2A) of the Act; Section 150 of the Act requires intimation to RoC where a company has converted any of its share into stock; Section 157 of the Act makes it compulsory for a company to inform the RoC situation of foreign register and where it is kept; Section 159 of the Act requires furnishing of annual returns to the RoC containing the particulars specified in part I of Schedule V; Annual returns along with certificate under Section 161 of the Act; Registration of resolution under Section 192 of the Act; Annual Balance Sheet and profit and loss under Section 220 of the Act; Appointment of Auditors under Section 224 of the Act. These are only some of the provisions that require a company to submit documents under the provisions of the Act. Requirement of Section 234 of the Act is thus satisfied for formation of opinion and it not always necessary for the RoC to seek information or explanation from the company for formation of opinion as per Section 234. In the considered opinion of this Court. Neither the principles of natural justice are inbuilt in Section 234 of the Act nor is it a sine qua non to call information from the petitioner company. Reliance placed on Badri Prasad Chikwa’s case (supra) is misconceived. In that case, the court was dealing with removal of Elected Counsellor of a Municipality under section 41 of the M.P. Municipalities Act, 1961. Section 41, itself provides for affording an opportunity of hearing before removing the Counsellor because such removal entails disqualification. Thus removal from elected office has civil consequences which are missing in the present case. Thus, in the considered opinion of this court, from the documents which a company is required to submit under the provisions of the Act, RoC may form an opinion that such documents disclose an unsatisfactory state of affairs or do not disclose full and fair statement of any matter to which the document purports to relate. It is not necessary for the RoC to seek information or explanation to form an opinion with regard to affairs of the company and for preparation of report. Under Section 234(1) read with Section 234(6). Parliament has entrusted the discretion to RoC to prepare and submit report. Such an administrative decision and function does not affect none of the fundamental right of the petitioner company, therefore, it is not open to primary or strict judicial review as explained in the latest decision of Their Lordships of the Supreme Court in Damoh Panna Sagar Rural Regional Bank v. Munna Lal Jain 2005 AIR SCW 95. Applying the Wednesbury’s principle, it is clear that the scope of judicial review in the present case is secondary in nature to see whether RoC can form an opinion on basis of documents submitted by a company under the provisions of the Act. In the foregoing discussion, it has already been held that from the documents which a company is required to submit under the provision of the Act, RoC may form an opinion if such documents disclose an unsatisfactory state of affairs or do not disclose full and fair statement of any matter to which the document purports to relate. Thus, on the secondary review, there is no arbitrariness in not seeking explanation or information from the company. Thus, there is no force in the submissions of Shri Vijay Asudani that principles of natural justice are inbuilt under Section 234 of the Act.
6. Now coming to other submissions of learned counsel for petitioner, in the considered opinion of this Court they are devoid of merit. The Central Government is not bound by the report of RoC. Under Section 235(1), it may order an investigation. An investigation is purely a fact-finding enquiry and nothing more that does not affect any of the rights of the petitioner-company. In the considered opinion of this Court the law relating to investigation as laid down in W.N. Chadha ‘s case (supra) is more close to the facts of the case in hand. Their Lordships after analyzing various authorities have held at the stage of investigation rule of audi alterem partem is inapplicable because the investigator is not deciding any matter except to collect material and prior notice and opportunity of hearing would frustrate very object of investigation and enquiry. Under the provisions of the Act, petitioner is entitled for a copy of report only under Section 241. During the course of final arguments, it was submitted by Shri Singh that investigator appointed by the Central Government has submitted the report and action thereon shall be taken as per law. One cannot forget that a company is a creature of the statute. There can be no doubt that one of the objects of the Companies Act is to throw open to all citizens the privilege of carrying on business with limited liability. Inevitably the business of the company has to be carried on through human agency, and that sometimes gives rise to irregularities and malapractices in the management of the affairs of the company. Protection of investors is one of the primary themes of the Act. If the relevant provisions of the Act dealing with enquiries and investigations of the affairs of the companies are considered from this point of view there would be no difficulty in holding that investigation ordered is not arbitrary.
7. The last submission was that during investigation petitioner or its principal officer under Section 240 of the Act can be compelled to give evidence that can be used against Company. By implication, learned counsel for petitioner tried to invoke the fundamental right guaranteed under Article 20(3) of the Constitution. This question was no longer res integra. A constitutional bench of five judges of the Supreme Court had settled the controversy in Raja Narayanlal Bansi Lal v. Maneck Phirose Mistry . According to said decision when a person is called upon under the provisions of Act, to give evidence and produce documents he cannot be said to be a person accused of any offence as is required under Article 20(3) of the Constitution.
8. In view of the foregoing discussion, this Court finds no merit in the submissions made by learned counsel for petitioner, it is not necessary to discuss various decisions cited at the time of arguments because in none of them controversy involved in the present case was dealt with. In the result, the writ petition fails and is accordingly stands dismissed. No order as to costs.