Jammu & Kashmir High Court
Guninder Jeet Singh Wazir vs Union Of India And Others on 7 July, 2026
2026:JKLHC-JMU:2125
Serial No. 120
HIGH COURT OF JAMMU & KASHMIR AND LADAKH
AT JAMMU
WP(C) No. 2022/2025
Guninder Jeet Singh Wazir .....Appellant(s)/Petitioner(s)
Through: Mr. K.S. Johal, Sr. Advocate with
Mr. Karman S Johal, Advocate
vs
Union of India and others ..... Respondent(s)
Through: Mr. Deewakar Sharma, Dy. AG
Mr. Ankur Sharma, Advocate with
Mr. Himani Khajuria, Advocate
CORAM: HON'BLE MR. JUSTICE SANJAY PARIHAR, JUDGE
ORDER
07.07.2026
1. The petitioner claims that he was one of the original Directors and
shareholders of M/s Shreekatyani Metal Private Limited, subsequently
renamed as M/s Shreekatyani Green Fuels Private Limited (hereinafter
referred to as “the Company”), holding approximately 33% of the share
capital, while the remaining shares were held by the private respondents.
According to the petitioner, he was arbitrarily removed from the
Directorship of the Company, and his shares were illegally transferred in
favour of the private respondents without his knowledge or consent.
2. Aggrieved by the aforesaid acts, the petitioner lodged a criminal complaint
before the Crime Branch, Jammu, on 25.07.2023 alleging fraudulent acts
on the part of the private respondents. He also submitted a complaint dated
22.05.2025 before the Department of Industries and Commerce alleging
that the private respondents, in collusion with the official respondents, had
fraudulently removed him from the Directorship on the basis of a
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purported Annual General Meeting of the year 2022, convened without
serving any prior notice as mandated under the provisions of the
3. It is further alleged that the petitioner’s Digital Signature Certificate (DSC)
was misused for filing Form MGT-14 without his knowledge or consent
and that, in connivance with the Company Secretary, the respondents
falsely reflected the transfer of the petitioner’s shares despite the absence
of the mandatory Share Transfer Form (Form SH-4). The petitioner also
alleges that the respondents acted in blatant violation of the Industrial
Policy, 2021-2030, particularly Clauses 5.1.6 and 5.1.10, which require
that the original shareholding of the Company should not undergo changes
beyond the permissible limit of 49%. It is further contended that Clause 36
of the Lease Deed, which stipulated that the original Directors, including
the petitioner, were to continue on the Board of Directors, has also been
violated.
4. The petitioner further contends that despite receipt of his complaint, the
Registrar of Companies (respondent No. 2) failed to initiate any inquiry
into the affairs of the Company in accordance with law. It is alleged that
respondent No. 2 failed to discharge its statutory obligations, while the
official respondents also acted in breach of the Industrial Policy.
Consequently, the petitioner has invoked the writ jurisdiction of this Court
seeking, inter alia, a direction to respondent No. 2 to conduct an inquiry
into the affairs of the Company and to investigate the alleged acts of fraud
and statutory violations. According to the petitioner, the inaction on the
part of the official respondents has caused grave prejudice to his rights,
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leaving him with no efficacious alternative remedy except to approach this
Court by way of the present writ petition.
5. This Court in terms of order dated 29.07.2025 had proceeded to direct
respondent No. 4 to 6 to bring under immediate attachment and sealing of
the industrial premises of Plot No. 24 leased out in favour of the company
in whatever new name and nomenclature the same may have translated
itself, and further not to allow any access of the directors thereto including
the petitioner as well as of the private respondents.
6. This order of the Court was carried in appeal by the private respondents by
way of LPA No.153/2025 raising the issue that the writ Court lack
jurisdiction to entertain the petition and also informing the appellate Court
that the petitioner herein had already resigned from the Company and
transferred all his shares in favour of the private respondents, inasmuch as
that the private respondents were fully complying with the mandate of
industrial policy 2021-2030, which appeal came to be disposed by
directing as under:
“08. Accordingly, for the present, the appeal is disposed of in terms of the
position sketched out above as also the statement made by the learned
counsel for the respective parties. The hearing of this petition before the
writ Court is preponed from September 10, 2025 to August 08, 2025.
Learned Single Judge is requested to take up the matter on adjourned date.
We are sanguine that every possible endeavour shall be made to decide the
matter finally or at least the pending application for interim relief at the
earliest. Further, as agreed between the learned counsel for the parties, to
avert any further complication, till the petition or the application for
interim relief is finally decided by the Writ Court, no third-party
rights/interest shall be created.”
7. Thereafter, the matter came up for consideration before this Court. During
the pendency of the writ petition, the petitioner filed an application
seeking permission to place on record the status report in connection with
FIR No. 58/2025 registered at Police Station Crime Branch, Jammu
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against respondent Nos. 8, 9 and 10 at the behest of petitioner for the
commission of offences punishable under Sections 420 and 120-B of the
Indian Penal Code. The said application was allowed and the status report
was taken on record.
8. Upon completion of pleadings, LC appearing for the private respondents,
on 29.06.2026, raised a preliminary objection with regard to the
maintainability of the writ petition. It was submitted that the issue of
maintainability had been raised from the very inception of the proceedings
and had also been specifically urged before the Division Bench in the
Letters Patent Appeal. While disposing of the said appeal, the Division
Bench, in paragraph 4 of its order, observed that, “in the circumstances
of the case, it would be expedient to request the learned Single Judge
to consider and decide the matter at the earliest, particularly since the
objections filed by the appellants to the writ petition as well as the
reply to the application seeking interim relief had already been placed
on record.”
9. Learned counsel for the respondents has vehemently argued that the
petitioner has sought two-fold reliefs: firstly, a direction for conducting an
enquiry into the affairs of the company; and secondly, initiation of action
against the respondents for their alleged non-compliance with the
Industrial Policy. According to him, the petitioner had earlier resorted to
lodging an FIR alleging various acts of omission and commission, and the
present writ petition has been filed on the very same set of facts. It is
contended that the petitioner has alleged that he suffered loss and
inconvenience on account of his clandestine removal from the directorship
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of the company and that, by playing fraud, his shares were transferred,
thereby depriving him of his interest in the affairs of the company. At the
same time, the petitioner has also asserted that the allotment of the land
was conditional in nature and did not confer ownership unless the entire
premium had been paid and a lease deed executed. He has further claimed
that he had contributed towards the premium along with the other
shareholders for the allotment of the plot in question.
10. Learned counsel for the respondents has further submitted that the
complaint filed by the petitioner before the Chief Judicial Magistrate,
Jammu, on 09.07.2025 under Section 175(3) of the BNSS, 2023
culminated in a direction for registration of an FIR. Consequently, FIR
No. 58/2025 under Sections 420 and 120-B of the IPC was registered at
Police Station Crime Branch, Jammu. It is submitted that, upon
investigation, the allegations of cheating levelled by the complainant were
found to be unsupported by any evidence. The investigating agency found
that neither any fraud nor any deception existed from the inception of the
incorporation of the company for establishing a malt business, nor in the
subsequent change of its object to setting up an Ethanol Manufacturing
Unit, or in the events that followed thereafter. Accordingly, the allegations
made by the complainant were found to be devoid of merit and
unsupported by documentary evidence.
11. In fact, the incorporation of M/s Shree Katayani Metal Private Limited
and M/s Shree Dakshayani Metal Private Limited was conceived pursuant
to a mutual understanding between the complainant and the alleged
accused. There was no fraudulent or dishonest intention at the inception of
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the transaction, nor was there any element of cheating or mala fide intent.
The complainant continues to be a Director and shareholder of M/s Shree
Dakshayani Metal Private Limited, which has also been allotted land by
the Industrial Corporation. Taking note of these facts, the Crime Branch
closed the complaint as “not admitted.”
12. Placing reliance on 2026 INSC 42, the counsel for the respondents
submitted that a person alleging fraud in the affairs of a company has an
efficacious statutory remedy under Section 213 of the Companies Act,
2013, by filing an appropriate application before the National Company
Law Tribunal (NCLT), subject to satisfying the eligibility requirements
prescribed under the Act. It was contended that the Companies Act
provides a complete and self-contained mechanism for redressal of the
grievances of a director or shareholder, who may approach the competent
authority under the Act by bringing to its notice any alleged malpractice or
violation of the provisions of law committed by the company’s office
bearers.
13. Learned counsel further submitted that recourse to the extraordinary writ
jurisdiction is wholly unwarranted. According to him, the petitioner had
voluntarily relinquished his position and is now seeking a writ of
mandamus for restoration of his shareholding and directorship in the
company, which relief cannot be granted in the exercise of writ
jurisdiction. It was further contended that the entire investment in the
company has been made by respondents Nos. 8 and 9. Although the
petitioner initially served as a Director, he was expected to contribute
capital proportionate to his shareholding. However, except for a sum of
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₹33,000, which was subsequently refunded to him upon his voluntary
resignation from M/s Shree Katayani Metal Private Limited, he failed to
make any such contribution.
14. It was further submitted that the Indian Renewable Energy
Development Agency Limited (IREDA) has sanctioned financial
assistance of ₹213 crore in favour of M/s Shree Katayani Metal Private
Limited, and a Letter of Intent has also been issued in favour of the
company by the Oil Marketing Companies. It was argued that, after
voluntarily resigning from the directorship and relinquishing his
shareholding, the petitioner filed a series of complaints, none of which
yielded the desired result. The present writ petition, therefore, has been
filed solely with the intention of obstructing the functioning of the
respondent company. It was further contended that the petitioner has
misused the judicial process with an oblique motive and, consequently, is
not entitled to any equitable relief from this Court.
15. Per contra, learned counsel for the petitioner vehemently contended that
the petitioner seeks a writ of mandamus on account of the admitted breach
of the Industrial Policy by the respondents. It was submitted that any
change in the constitution of the company requires the prior approval of
the Director, Industries, as the Industrial Policy mandates that, in the event
of any change in the shareholding pattern, the original shareholders must
continue to hold at least 51% of the shareholding in the same legal entity.
According to the petitioner, the private respondents have blatantly violated
the said requirement by reducing the shareholding of the original
promoters below the prescribed threshold, in contravention of Clause 5.1.6
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of the Industrial Policy. It was further submitted that the documents
evidencing the transfer of shares in favour of outsiders already form part
of the record.
16. Learned counsel further submitted that, in terms of Clause 5.1.11 of the
Industrial Policy, if the leasehold rights are transferred or the constitution
of the allottee company is altered before the industrial unit is brought into
production, such transfer is void and the allotted land is liable to be
resumed upon cancellation of the allotment.
17. It was further contended that Clause 36 of the Lease Deed dated
23.08.2022 expressly stipulates that the original Directors of the lessee
company shall not alter the constitution of the company except with the
prior written consent of the lessor, namely SIDCO, which had allotted the
industrial plot to the company. It was argued that, since there has been a
clear violation of the Industrial Policy as well as the terms and conditions
of the Lease Deed, the statutory authorities are under a corresponding
obligation to enforce the consequences of such breach, including
cancellation of the registration of the manufacturing unit and resumption
of the allotted public land measuring 100 kanals situated at the prime
industrial location of Logate Industrial Estate, Kathua. It was further
submitted that the Industrial Policy framed by the Government of Jammu
and Kashmir is required to be implemented uniformly and fairly, without
compelling an aggrieved party to repeatedly approach the authorities for
enforcement. Learned counsel distinguished the judgment relied upon by
the respondents by contending that the relief sought in the present petition
is not confined to an inquiry into the affairs of the company under the
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Companies Act but also seeks enforcement of the provisions of the
Industrial Policy and prevention of the alleged misuse of public land and
benefits arising from the respondents’ collusive conduct. It was, therefore,
argued that a writ of mandamus is maintainable at the instance of a citizen
alleging failure on the part of the statutory authorities to discharge their
statutory obligations.
18. Having heard both counsels, there is no denial to the admitted factual
position that a private company in the name of SHREE KATYANI
METAL PRIVATE LIMITED (hereinafter in short “SMPL”) came to be
incorporated in terms of Certificate of Incorporation dated 09.07.2021
issued by the Registrar of Companies, Ministry of Corporate Affairs,
Government of India, Central Registration Centre in terms of the
Companies Act, 2013 read with Companies (Incorporation) Rules, 2014.
Registered office of SMPL being residential address of the petitioner
which being 18-A, Sector 7, Trikuta Nagar, Jammu. The constituent
directors of SMPL are three directors and they being the petitioner, the
respondent No. 9-Nidhi Gupta and the respondent No. 10-Nittin
Maheshwari with equal share holding of 330 equity shares each counting
1,000 shares in total.
19. As a company-SMPL ventures itself to respond to an Industrial Policy
2021-2030 floated by the Government of UT of J&K for the purpose of
encouraging setting up of industrial activity in the UT of Jammu &
Kashmir which led to a proposal generated from the end of SMPL for
seeking lease of industrial plot of land for the purpose of setting up of an
industrial unit for manufacturing of ETHANOL/ENA (Extra Neutral
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Alcohol) and other allied/intermediate products. Thus, vide an allotment
letter No. SICOP/MD/2022/1630-38 dated 15.02.2022 approval for
granting lease of 100 kanals of land comprised in the Industrial Estate
SICOP, Sahar Logate, Kathua J&K (UT) resulted in execution and
registration of a Lease Deed dated 23.08.2022 categorically bearing
reference to the petitioner as well as to the respondents Nos. 8 & 9 with
addition of one Sh. Nishit Khandelwal as directors of the lessee SMPL.
20. On behalf of SMPL, the signatory to the lease deed was the respondent
No. 8-Nitin Gupta as being authorized signatory who incidentally is
husband of the respondent No. 9-Nidhi Gupta, one of the three original
directors of SMPL. While the recommendation for grant of lease of
industrial plot in favour of the SMPL had come to be generated on
15.02.2022, by the month of May, 2022 one of three original directors,
namely, Nitin Maheshwari, holder of 330 equity shares is said to have
resigned resulting in induction of one Nishit Khandelwal in place of
outgoing director. Even Nitin Maheshwari is said to have then resigned
from the post of directorship w.e.f. 28.05.2022 meaning thereby post
recommendation in February, 2022 for grant of lease of 100 kanals of
industrial plot but before execution of lease deed in favour of SMPL when
the case for seeking lease of industrial plot in favour of SMPL was put in
process with representation of three directors constituting SMPL and they
being the petitioner, respondent No. 8-Nitin Gupta & respondent No. 9-
Nidhi Gupta only. The purported induction of Nishit Khandelwal is said to
have taken place in terms of Board of Directors’ resolution of SMPL
signed by the respondent No. 9-Nidhi Gupta and joined by the respondent
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No. 8-Nitin Gupta identifying himself to be the director in terms of
resolution dated 28.05.2022 again post February, 2022 sanction for grant
of lease of industrial plot of 100 kanals in favour of SMPL.
21. During the pendency of the proceedings, the respondents placed on record
the Final Police Report (Ikhtami) submitted by the Economic Offences
Wing, Crime Branch, Jammu, in connection with FIR No. 58/2025.
According to the findings recorded therein, the investigating agency
concluded that directorship of a company does not, by itself, confer
ownership of the company’s assets, whereas shareholding determines the
economic interest of a shareholder. It was observed that the petitioner held
only 330 shares, having a face value of Rs. 33,000/-, and that the
corresponding amount had already been credited to the petitioner’s account
in the year 2022. The investigating agency further concluded that, as on
22.03.2022, the company had neither any operational business nor any
assets. It was also observed that the allotment of land was merely
conditional and did not confer ownership upon the company unless the
entire premium was paid and the lease deed was duly executed.
22. During the course of investigation, it was further found that the entire
premium for the allotted land had been paid by the other shareholders and
not by the petitioner. Learned counsel for the respondents also invited the
attention of the Court to the opinion recorded by the Investigating Officer,
wherein it has been opined that the allegations of cheating levelled by the
complainant are devoid of substance, as no evidence of fraud or deception
was found from the inception of the company, either at the time of its
incorporation for carrying on the business of metal trading or thereafter
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upon the change in its objects to ethanol manufacturing, or in the
subsequent course of events. When confronted with the aforesaid aspects,
learned counsel for the petitioner argued that the Final Police Report has
no bearing on the controversy involved in the present proceedings and that
the findings recorded therein are open to challenge by the petitioner before
the appropriate forum in accordance with law.
23. Having heard learned counsel for the parties, there is no dispute that the
petitioner essentially claims that, being a Director of the company, he was
clandestinely removed from the directorship on account of the alleged
fraud perpetrated by the private respondents. During the course of
arguments, learned counsel for the respondents drew the attention of the
Court to the fact that the transfer of shares had taken place on 22.03.2022
and that the consideration towards the transferred shares had been credited
to the petitioner’s account, which fact has not been denied by the
petitioner. It was further submitted that Form MGT-14, bearing the
digital signature of the petitioner, is also available on record. Learned
counsel for the petitioner, however, disputed the authenticity of the said
documents, contending that respondent Nos. 8 and 9, in connivance with
their authorised representatives, had manipulated the records and
fraudulently misused the petitioner’s digital signatures. It was also
submitted on behalf of the respondents that petitioner’s authorised
representative, Mr. Vicky Pangotra, was examined by the Crime Branch
and that the alleged email trail relied upon by the respondents, purporting
to establish that the petitioner’s resignation and transfer of shares were
effected with his approval and consent. Be that as it may, the correctness
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and evidentiary value of the Final Police Report submitted by the Crime
Branch are matters that fall for consideration before the competent forum.
Nevertheless, while examining the maintainability of the present writ
petition, this Court cannot altogether ignore or brush aside the existence
and contents of the said report.
24. In AIR 1997 SC 2189 Sri Ramdas Motor Transport Ltd. & Ors. v. Tadi
Adhi Narayana Reddy & Ors. the Supreme Court was dealing with a
dispute raised by 61 shareholders, including certain employees, of a
private limited company, who alleged oppression of minority shareholders
and mismanagement of the affairs of the company by its Directors. The
shareholders had sought various reliefs, including restraint orders against
the officers of the company, on the ground that they had indulged in acts
of mismanagement. The dispute was already pending before the Company
Law Board, which had passed certain interim directions. During the
pendency of those proceedings, the shareholders invoked the writ
jurisdiction of the High Court under Article 226 of the Constitution of
India, seeking an investigation into the affairs of the company and
consequential action against its Chairman and Managing Director. Upon
examining the scheme of the Companies Act, the Hon’ble Supreme Court
observed that no effort had been made by the shareholders to have the
affairs of the company investigated in the manner contemplated under the
provisions of the Companies Act. The Court, therefore, held as under:
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“Some of the shareholders of the first appellant-company have, in fact,
filed petitions under Section 397 and 398 of the Companies Act before
the Company Law Board in which they have asked for similar reliefs
including the appointment of an interim administrator. The acts of
mismanagement and only ground alleged in the writ petition for
moving the High Court under Article 226 is that the Company Law
Board is not moving in the matter under an excuse that the Company
Law Board has not yet made an order, a shareholder cannot be
allowed to bypass the express provisions of the Companies Act and
move the High Court under Article 226. A shareholder has a very
effective remedies under the Companies Act for prevention of
oppression and mismanagement. When such remedies are available,
the High Court should not readily entertain a petition under Article
226.
Learned Single Judge before whom the present writ petition came up
for hearing very rightly held that the Companies Act provides a forum
to consider the grievances made out by the First respondent in the
writ petition. When such a forum, statutorily constituted, exists, it is
but appropriate that resort to Article 226 should be discouraged.
There is an efficacious alternative remedy available under the statute.
In fact, under the Companies Act, a more satisfactory solution is
available. The Single Judge was right in pointing out that some of the
shareholders have initiated proceedings before the Company Law
Board. The only grievance of the petitioner in the writ petition is that
no orders have been passed thereon. The Single Judge has rightly held
that such a grievance cannot constitute a ground for invoking the
jurisdiction of the High Court under Article 226. He, therefore,
dismissed the writ petition.
In appeal, however, the Division Bench of the Andhra Pradesh High
Court presided over by the Chief Justice, entertained the appeal on
the ground that the petition raised many serious issues as to
falsification of the accounts of a public limited company. It said that
the acts of the company would jeopardize public interest. Therefore,
the petition involved wider “public interest” and should be
entertained. In the result the Division Bench issued a direction to the
Central Government to make its own verification of the allegations in
the writ petition. In other words, the Division Bench of the High Court
directed an investigation into the affairs of the company, bypassing
the detailed provisions with inbuilt safeguards under the Companies
Act, designed especially for this purpose. The only ground for
intervention appears to be “public interest”. We fail to see what
public interest is involved in disputes of the kind referred to in the writ
petition. They basically deal with mismanagement of the affairs of the
company and oppression of the minority shareholders. The company
in only a deemed public limited company. Its shareholding is very
closely held. The only other factor referred to in the writ petition to
invoke the doctrine of so-called public interest, is the fact that the
company had borrowed moneys from public institutions. This is no
ground for not availing of the statutory remedies provided under the
Companies Act before the appropriate statutory forums which are
designed for this very purpose. We are distressed to find that the well-
reasoned judgment of the Single Judge was interfered with in a casual
manner. The impugned judgment rests on fragile foundations and
reads more like an ipse dixit.”
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25. When confronted with the aforesaid proposition, the counsel for the
petitioner submitted that, even assuming, for the sake of argument, that the
dispute regarding the affairs of the company is required to be examined by
the authorities under the Companies Act, the present writ petition cannot
be held to be not maintainable insofar as it seeks relief against the official
respondents. According to the petitioner, respondent Nos. 8 and 9 have
acted in violation of the Industrial Policy by effecting a change in the
constitution and management of the industrial unit without obtaining the
prior approval of the Director, Industries and Commerce (respondent No.
3), as mandated under Clause 5.1.10 of the applicable Industrial Policy. It
was contended that no such permission had ever been obtained and that
the stand taken by official respondent Nos. 3 to 6 clearly demonstrates
their failure to enforce the provisions of the Industrial Policy, thereby
substantiating the petitioner’s grievance.
26. Learned counsel for the respondents, on the other hand, vehemently
contended that even the aforesaid issue is ancillary to, and intrinsically
connected with, the affairs and management of the company, which falls
within the exclusive domain of the authorities constituted under the
Companies Act. Drawing the attention of the Court to the jurisdiction of
the National Company Law Tribunal (NCLT), it was argued that any
person aggrieved by the affairs or management of a company has an
efficacious statutory remedy, including the right to invoke the jurisdiction
of the NCLT by filing an appropriate application under Section 213 of the
Companies Act, 2013. It was further submitted that, under Section 211 of
the Companies Act, the Central Government has established the Serious
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Fraud Investigation Office (SFIO) to investigate cases involving fraud
relating to the affairs of companies, including investigations directed in
public interest. Learned counsel, therefore, contended that the grievance
raised by the petitioner essentially pertains to his private rights arising out
of the internal affairs of the company and that, after lodging an FIR
against the respondents, he instituted the present writ petition without
awaiting the outcome of the investigation, with the sole object of
harassing the private respondents.
27. A plain reading of the writ petition reveals that the petitioner is essentially
aggrieved by the alleged fraudulent transfer of his shares and his unlawful
removal from the directorship of the company. He claims to have brought
these facts to the notice of the Registrar of Companies, but alleges that no
action has been taken. The substance of the relief sought, therefore, is an
investigation into the affairs of the company. Section 213 of the
Companies Act, 2013 empowers the National Company Law Tribunal,
upon an application made by any person and upon being satisfied that
circumstances exist suggesting that the business of the company is being
conducted with intent to defraud its creditors, members or any other
person, or for a fraudulent or unlawful purpose, or that the persons
concerned in the formation or management of the company have been
guilty of fraud, misfeasance or other misconduct towards the company or
its members, or that the members have not been furnished with all material
information relating to the affairs of the company, to direct an
investigation into the affairs of the company.
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28. Upon affording a reasonable opportunity of hearing to the parties
concerned, the Tribunal may order that the affairs of the company be
investigated by one or more Inspectors appointed by the Central
Government. Once such an order is passed, the Central Government is
under a statutory obligation to cause an investigation into the affairs of the
company in accordance with the directions issued by the Tribunal. The
proviso to Section 213 further provides that where the business of the
company has been carried on with intent to defraud its creditors or
members, or where any person concerned in the formation or management
of the company is found guilty of fraud, every officer of the company who
is in default shall be liable to be punished in accordance with Section 447
of the Companies Act. Section 447 defines “fraud” in relation to the affairs
of a company to include any act, omission, concealment of fact or abuse of
position committed by any person with intent to deceive, to gain undue
advantage, or to injure the interests of the company, its shareholders or
creditors, resulting in wrongful gain or wrongful loss.
29. Section 448 of the Companies Act further provides that any person who
knowingly makes a false statement in any return, report, certificate,
financial statement, prospectus or other document required under the Act
shall be liable for punishment in accordance with law. It is also relevant to
note that, pursuant to the Companies (Amendment) Act, 2015, the
provisions of Section 213 became operational with effect from
01.06.2016, thereby enabling the National Company Law Tribunal to
direct investigation into the affairs of a company. The legislative intent
behind the constitution of the Tribunal and the Appellate Tribunal was to
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ensure expeditious adjudication of disputes arising under the Companies
Act through specialized forums.
30. Learned counsel for the petitioner placed reliance upon AIR 2005 SC
3202, wherein the Hon’ble Supreme Court held that a writ of mandamus
may, in appropriate cases, be issued even against a private body which is
not “State” within the meaning of Article 12 of the Constitution, provided
such body performs a public duty or discharges a public function. The
Supreme Court further held that the High Court, in exercise of its
jurisdiction under Article 226 of the Constitution, may judicially review
actions of such bodies. However, the Court simultaneously emphasized
that the exercise of writ jurisdiction necessarily requires the existence of a
public law element and cannot ordinarily be invoked for enforcement of
purely private contractual or personal rights.
31. The facts of the present case stand on an entirely different footing. The
petitioner’s grievance essentially arises from his alleged unlawful removal
from the directorship of the company and the purported fraudulent transfer
of his shares by the private respondents. The relief sought is, therefore,
directed towards enforcement of private rights arising out of the internal
affairs and management of the company. The petitioner has efficacious
statutory remedies available under the Companies Act. Merely because he
alleges inaction on the part of the official respondents does not convert
what is essentially a private corporate dispute into one involving a public
law element warranting exercise of writ jurisdiction.
32. It is well settled that the existence of an alternative remedy does not
operate as an absolute bar to the exercise of jurisdiction under Article 226
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of the Constitution. Nevertheless, where an equally efficacious statutory
remedy exists and the dispute pertains to questions of fact involving
private rights, the High Court would ordinarily decline to exercise its
extraordinary writ jurisdiction. In the present case, the petitioner alleges
that he was fraudulently removed from the directorship, disputes the
validity of the transfer of shares, asserts that his consent cannot be inferred
merely from Form MGT-14, and contends that the alleged use of his
digital signatures does not establish free and informed consent. He further
disputes the authenticity of the documents relied upon by the respondents.
These are disputed questions of fact requiring appreciation of evidence
and investigation, which cannot appropriately be adjudicated in
proceedings under Article 226 of the Constitution.
33. The petitioner further contends that he never executed Form SH-4 and
that no such duly executed instrument of transfer is available. This, too, is
a matter requiring examination by the competent authorities under the
Companies Act. Learned counsel argued that the Registrar of Companies
possesses powers under Sections 206, 207, 208, 209, 210 and 212 of the
Companies Act to conduct inspection, inquiry or investigation and, having
failed to exercise such powers, the petitioner was left with no remedy
except to invoke the writ jurisdiction of this Court. Even if such
contention is accepted, the petitioner nevertheless has an efficacious
remedy under Section 213 before the National Company Law Tribunal,
which is competent to examine allegations relating to the affairs of the
company and, where circumstances so warrant, direct investigation into
allegations of fraud committed by the officers of the company, as
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2026:JKLHC-JMU:2125
recognised in Sri Ramdas Motor Transport Ltd. & Ors. v. Tadi
Adhinarayana Reddy & Ors. (supra).
34. In the aforesaid decision, the Supreme Court observed that even where
proceedings under the company law were already pending, recourse to the
writ jurisdiction was not warranted in respect of grievances arising out of
the internal affairs of the company. The Court held that such disputes do
not ordinarily involve a public law element justifying exercise of
jurisdiction under Article 226 when an effective statutory remedy is
available. It was further observed that an investigation into the affairs of a
company is a serious matter capable of causing substantial prejudice to its
business and reputation and, therefore, ought not to be directed lightly or
without sufficient material gathered in the manner prescribed under the
Companies Act. Applying the aforesaid principles to the facts of the
present case, this Court finds that the petitioner seeks enforcement of
essentially private rights, for which complete and efficacious remedies are
available under the Companies Act. Even the allegation regarding inaction
on the part of the official respondents in relation to the lease conditions is
intrinsically connected with the alleged alteration in the constitution and
management of the company, which is a matter capable of examination by
the competent authorities under the Companies Act and does not, by itself,
warrant invocation of writ jurisdiction.
35. Once the Companies Act provides a comprehensive statutory mechanism,
specialised adjudicatory forums and equally efficacious remedies for
redressal of grievances relating to the affairs and management of a
company, no writ of mandamus can ordinarily be issued requiring this
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2026:JKLHC-JMU:2125
Court to adjudicate what is essentially a dispute concerning shareholding,
directorship and corporate management. The contention that the National
Company Law Tribunal cannot grant complete relief is without merit.
Even the alleged violation of the Industrial Policy, if ultimately found to
have any bearing upon the allotment or continuance of the lease in favour
of the company, would necessarily be dependent upon determination of
the underlying corporate dispute, which falls within the jurisdiction of the
authorities constituted under the Companies Act.
36. For the foregoing reasons, this Court finds merit in the preliminary
objection raised by the private respondents regarding the maintainability
of the writ petition. In view of the equally efficacious statutory remedy
available to the petitioner under the Companies Act, 2013, the writ
petition is held to be not maintainable. Accordingly, the writ petition is
dismissed, while reserving liberty to the petitioner to avail such remedies
as may be available to him before the competent authorities under the
37. Consequently, interim directions, if any, shall stand vacated.
(Sanjay Parihar)
Judge
Jammu
07.07.2026
Rahul Sharma
Whether the order is speaking: Yes
Whether the order is reportable: Yes
