Modification of SFIO Probe not Review, Only Change of Agency: NCLAT [Read Order]

The National Company Law Appellate Tribunal (NCLAT), Chennai Bench, has held that merely changing the investigating agency from the Serious Fraud Investigation Office (SFIO) to an Inspector appointed by the Central Government does not amount to a review or recall of an earlier order directing an investigation into a company’s affairs.

Paul Joseph, appellant, who had challenged an order dated 3 January 2024 passed by the National Company Law Tribunal (NCLT), Kochi Bench. By the impugned order, the NCLT had modified its earlier order of 11 March 2020, replacing the SFIO with a Central Government-appointed Inspector to continue the investigation into the affairs of Bhagyodayam Company, one of the respondents

The appellant, Paul Joseph, argued that the change amounted to an impermissible review or recall of the earlier order and was passed without issuing notice, thereby violating principles of natural justice.

The Appellate Tribunal noted that the objective, purpose, and scope of the investigation remained unchanged, and only the investigating agency had been altered. Since the principal direction to conduct an investigation continued to operate, the impugned order could not be treated as a recall or review of the 11 March 2020 order

The bench, Justice Sharad Kumar Sharma (judicial member), J. Atindranath Swain ( Technical member), further held that the appellant could not object to the modification when he had never challenged the original order directing investigation by the SFIO.

A mere change in the investigating authority, the tribunal observed, does not affect the rights of the parties. Also clarified that NCLT has the jurisdiction to decide the appropriate investigative machinery

Thus, the Appeal lacks merit, and the same is accordingly dismissed.

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