{"id":214240,"date":"2019-05-02T14:11:34","date_gmt":"2019-05-02T08:41:34","guid":{"rendered":"https:\/\/www.scconline.com\/blog\/?p=214240"},"modified":"2019-05-02T14:11:34","modified_gmt":"2019-05-02T08:41:34","slug":"mere-search-under-section-240a-of-companies-act-without-seizure-wont-suffice-the-purpose-of-investigation","status":"publish","type":"post","link":"https:\/\/www.scconline.com\/blog\/post\/2019\/05\/02\/mere-search-under-section-240a-of-companies-act-without-seizure-wont-suffice-the-purpose-of-investigation\/","title":{"rendered":"Mere search under Section 240A of Companies Act without seizure won\u2019t suffice the purpose of investigation"},"content":{"rendered":"<p style=\"text-align: justify;\"><strong>Supreme Court<\/strong>: Asking High Court to be more circumspect before it restrains an investigation under the statutory authority of the Director General of the Competition Commission, the bench of Dr. DY Chandrachud and Hemant Gupta, JJ remitted back a matter to Delhi High Court that dealt with the powers of search and seizures of the Director General of CCI.<\/p>\n<h5 style=\"text-align: justify;\">Relevant Provisions<\/h5>\n<ul style=\"text-align: justify;\">\n<li>Section 41(3) of Competition Act, 2002 specifically incorporates a reference to Section 240A in its application to an investigation by the Director General under the provisions of the Competition Act 2002.<\/li>\n<li>Under Section 240A, an Inspector who has reasonable ground to believe that books and papers of, or relating to, any company may be destroyed, mutilated, altered, falsified or secreted may apply to the Magistrate to secure an authorisation for the seizure of the books and papers.<\/li>\n<\/ul>\n<h5 style=\"text-align: justify;\">Background<\/h5>\n<ul style=\"text-align: justify;\">\n<li>The Chief Metropolitan Magistrate allowed the application on 17 September 2014. The search operation was carried out on 19 September 2014.<\/li>\n<li>An interim application was filed before the Delhi High Court in the pending writ petition for quashing the search and seizure and for the return of all documents, hard drives and laptops seized during the course of the search and seizure operation and for a stay on the investigation.<\/li>\n<li>The Delhi High Court, by its order dated 26 September 2014, stayed further proceedings before the Director General of Investigation.<\/li>\n<li>Applying the provision under Section 240A of the Companies Act, 1956, the High Court had held that a reading of the order passed by the Chief Metropolitan Magistrate does not indicate any authorisation to the Director General to carry out any other exercise other than searching for relevant material.<\/li>\n<\/ul>\n<h5>Ruling<\/h5>\n<p style=\"text-align: justify;\">The Court noticed that the provisions of Section 240A do not merely relate to an authorisation for a search but extend to the authorisation of a seizure as well. Unless the seizure were to be authorised, a mere search by itself will not be sufficient for the purposes of investigation.<\/p>\n<p style=\"text-align: justify;\">It, hence, held,<\/p>\n<blockquote>\n<p style=\"text-align: justify;\">\u201cHaving due regard to the provisions of Section 240A and the underlying purpose of Section 41(3), we are of the view that the blanket restraint which has been imposed by the learned Single Judge on the appellants utilising the seized material for any purpose whatsoever was not warranted. The High Court has blocked the investigation on an erroneous construction of the powers of the Director General.\u201d<\/p>\n<\/blockquote>\n<p style=\"text-align: justify;\">[Competition Commission of India v. JCB India Ltd., CRIMINAL APPEAL NO. 76-77 OF 2019, order dated 15.01.2019]<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Supreme Court: Asking High Court to be more circumspect before it restrains an investigation under the statutory authority of the Director General <\/p>\n","protected":false},"author":121,"featured_media":154914,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[3,9],"tags":[35170,35171,35174,35173,35172],"class_list":["post-214240","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-casebriefs","category-supremecourt","tag-competition-commission","tag-director-general","tag-scope-of-power","tag-search-and-seizure","tag-section-240a-of-companies-act"],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v27.4 (Yoast SEO v27.4) - 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