NCLAT Modifies NCLT Order Forwarding Case to SFIO: Holds Directions Beyond Jurisdiction

The National Company Law Appellate Tribunal (NCLAT) has modified an order from the National Company Law Tribunal (NCLT), holding that the NCLT does not have the jurisdiction to unilaterally direct an investigation by the Serious Fraud Investigation Office (SFIO). The NCLAT clarified that while the NCLT can form an opinion that a case requires an SFIO probe, the power to actually order such an investigation rests with the Central Government. The appellate tribunal stated that the NCLT's role is to record its reasons for recommending an investigation and then forward the case to the government for a final decision. By modifying the NCLT's original order, which had directly instructed the SFIO, the NCLAT has delineated the jurisdictional boundaries between the tribunal and the executive, ensuring that the statutory process for initiating SFIO investigations is correctly followed.