The Karnataka High Court dismissed a petition by Razorpay co-founders Harshil Mathur and Shashank Kumar seeking to quash an SFIO complaint filed against them. The case is linked to alleged corporate fraud investigated by the Serious Fraud Investigation Office under Section 212 of the Companies Act, 2013. The HC refused to interfere with the SFIO proceedings, affirming the agency's statutory authority to investigate and file complaints against company directors and officers.

This case spotlights the Serious Fraud Investigation Office (SFIO) — a multi-disciplinary body under the Ministry of Corporate Affairs established under Section 211 of the Companies Act, 2013. Its investigative powers are governed by Section 212, which authorises the Central Government to order an SFIO investigation when fraud is suspected in a company's affairs.

Key features of Section 212 that CLAT PG tests:

1. TRIGGER: The Central Government may order SFIO investigation on receipt of a report from the Registrar or inspector, or on intimation from any court, or in public interest.

2. EXCLUSIVITY: Once SFIO takes up investigation, no other agency (police, ROC) can investigate the same matter without SFIO's prior permission.

3. DIRECTOR LIABILITY: Section 212(6) creates a presumption of guilt — if an officer or director is arrested by SFIO, bail is granted only if the court is satisfied that the accused is not guilty and will not commit any offence while on bail (conditions mirroring PMLA).

4. COGNIZABLE AND NON-BAILABLE: Offences investigated by SFIO under Section 212(6) are cognizable and non-bailable.

5. SFIO report as complaint: Under Section 212(14), the SFIO investigation report filed with the court is deemed to be a police report under Section 173 CrPC (now BNSS).

The Razorpay case affirms that High Courts will not ordinarily interfere with SFIO proceedings at the complaint stage, reinforcing SFIO's autonomous investigative authority.