Calcutta High Court Puts Interim Hold On SFIO Inquiry In HNGIL Provident Fund Trust Dispute

Background of the Litigation

The Division Bench of the Calcutta High Court heard three connected appeals arising out of a common judgment and order dated 3 August 2026 passed by a learned Single Judge. The impugned order had:

  • Continued an ex parte ad interim injunction originally granted on 16 June 2026,
  • Rejected two applications filed for vacating that injunction, and
  • Directed the parties to exchange affidavits in the pending injunction application.

The appeals were filed in the matter titled “Sanjay Somany And Ors. Vs Hindusthan National Glass And Industries Limited (HNGIL) And Ors.”. The appeals were numbered as follows:

  • APO/56/2026 by defendant nos. 2, 3 and 4,
  • APO/57/2026 by defendant nos. 5 to 8, and
  • APO/58/2026 by defendant no. 1.

The underlying civil suit is primarily a money recovery action. The first two reliefs sought in the plaint are for money decrees:

  • A claim for an amount exceeding Rs.20 crores, and
  • A separate claim for an amount exceeding Rs.35 lakhs.

The dispute centres on alleged defalcations connected with the funds of an Exempted Employees Provident Fund Trust linked to Hindusthan National Glass And Industries Limited (HNGIL). The company had previously undergone a Corporate Insolvency Resolution Process (CIRP), following which a Resolution Plan was approved and a new management took over.

Core Issues Raised Before the Division Bench

The appellants argued that there was a fundamental disconnect between the plaintiff company and the Exempted Employees Provident Fund Trust:

  • The suit was initiated by a limited liability company (the plaintiff) asserting rights in relation to the activities of an Exempted Employees Provident Fund Trust.
  • It was contended that the plaintiff company and the said Trust are distinct and separate legal entities.
  • A key question raised was whether the plaintiff has the legal authority or locus to maintain a suit concerning the affairs and alleged mismanagement of the Trust.

Competence of SFIO to Investigate the Trust

One of the principal grounds of challenge related to the direction for investigation by the Serious Fraud Investigation Office (SFIO). The appellants submitted that:

  • Any alleged defalcation, even if assumed, pertains to the internal affairs of an Exempted Employees Provident Fund Trust.
  • Such a Trust, according to the appellants, does not fall within the category of entities which can be subjected to an SFIO probe under the Companies Act 2013 at the instance of the plaintiff company.
  • They therefore argued that SFIO has no jurisdiction to undertake such investigation on the basis of the impugned judicial direction.

Validity of the Ex Parte Injunction

The appellants further attacked the ex parte ad interim injunction dated 16 June 2026 and its continuance by the order dated 3 August 2026, on the following lines:

  • The three well-established preconditions for grant of an ex parte injunction (prima facie case, balance of convenience, and irreparable injury) were allegedly not satisfied on the material presented.
  • The appellants maintained that the learned Single Judge had not adequately tested these criteria before granting or extending the injunction.
  • They also contended that the injunction has serious consequences for their rights and reputation, particularly in light of the parallel direction for SFIO investigation.

Direction for SFIO Investigation Without Pleading or Prayer

Another serious objection related to the procedure followed in directing SFIO to investigate:

  • The appellants pointed out that the plaint and the injunction application did not contain any specific prayer or explicit pleading seeking an investigation by SFIO.
  • They argued that, in the absence of a precise pleading and formal relief to that effect, the court ought not to have ordered an SFIO probe.
  • This, according to them, exceeded the scope of the plaintiff’s case as framed.

Absence of Allegation Against Employer Company in Pleadings

The appellants also relied on the structure and contents of the plaint and injunction petition:

  • They contended that there is no direct allegation that the employer, namely the plaintiff company, committed any defalcation in relation to the Trust funds.
  • As a result, they argued that the foundation for any direction that might implicate or affect the company or various defendants was weak or non-existent in the pleadings themselves.

Alleged Suppression of Material Facts

Another significant point pressed by the appellants was the alleged suppression of a police complaint:

  • A police complaint dated 8 June 2026 had been lodged prior to the ex parte order of 16 June 2026.
  • The appellants alleged that this fact, or at least the existence and filing of the said police complaint, was not disclosed to...