Calcutta High Court Stays SFIO Probe Into Alleged Misuse Of HNGIL Exempted Employees' Provident Fund Trust

The Calcutta High Court on Wednesday stayed a Serious Fraud Investigation Office (SFIO) investigation into alleged financial irregularities involving funds of an exempted provident fund Trust operated by Hindusthan National Glass and Industries Limited (HNGIL) for its employees.

A Division Bench of Justices Debangsu Basak and Aryak Dutt modified the August 3, 2026, order of the Single Judge. The order had extended an ex parte ad interim injunction and continued the direction for an SFIO investigation.

The bench directed that if the Trial Judge directs an SFIO investigation after a contested hearing of the injunction petition, the agency shall not undertake the investigation for 15 days from such order.

The court ruled, “In such circumstances, we modify the impugned judgment and order by staying the direction with regard to the investigation by the SFIO. In the event of contested hearing of the injunction petition, learned Trial Judge is pleased to direct the investigation by the SFIO, in such an eventuality, SFIO will not undertake the investigation for a period of 15 days from such judgment and order.”

The case concerns an exempted provident fund Trust through which HNGIL operated provident fund benefits for its employees. After the present management took control of HNGIL in September 2025, it conducted an internal review and audit of the Trust.

The audit was said to have revealed financial irregularities allegedly involving the erstwhile trustees and a former HNGIL employee. HNGIL subsequently filed a suit seeking recovery of the alleged losses from the defendants.

The suit seeks recovery of more than ₹20 crore under one claim. It also seeks more than ₹35 lakh under another claim. The Division Bench noted that both claims were directed against identified defendants.

On June 16, 2026, the Single Judge passed an ex parte ad interim injunction restraining the defendants from using specified bank accounts and processing transactions. The Judge also directed an SFIO investigation. The order was corrected on June 18.

On August 3, the Single Judge declined to vacate the interim order. The applications filed by the defendants seeking to vacate the order were dismissed, while the injunction petition was kept pending for hearing on affidavits.

The defendants challenged the SFIO direction before the Division Bench. They argued that the Trust and HNGIL were separate legal entities.

They also argued that any alleged wrongful diversion or misuse of funds in the Trust could not be investigated by SFIO under the Companies Act, 2013. The defendants further contended that there was no pleading or prayer in the suit seeking an SFIO investigation.

The Division Bench did not finally decide these issues. It observed that the allegations concerning the Trust required consideration.

The Court also said the Trial Judge would have to decide whether HNGIL could justifiably pursue its case against the defendants concerning the affairs of the Trust.

“The allegations in the plaint relate to alleged defalcations with regard to the funds of an Exempted Employees Provident Fund Trust. Such allegations require consideration. Issue as to whether or not the plaintiff can justifiably run a case as against the defendants in relation to the affairs of an Exempted Employees Provident Fund Trust should be decided. Ideally, such decisions be rendered by the learned Trial Judge.”, it ruled.

The bench held that all points raised by the parties should remain open for final determination in the injunction petition. It noted that deciding the issues at this stage could prejudice the defendants while they were still required to file their affidavits.

The court therefore modified the August 3 order and limited its operation to December 31, 2026. The defendants were given one week from September 16 to file their affidavits in opposition.

Replies, if any, are to be filed within two weeks thereafter. The injunction petition is to be listed before the Trial Judge three weeks from September 16, if it has not already been listed.

The bench further directed that if the injunction petition is not heard and decided by December 31, the parties may approach the Trial Judge for appropriate orders.

For Appellant: Senior Advocate S. N. Mookherjee, Senior Advocate Debnath Ghosh, Advocates Shaunak Mitra, Urmila Chakraborty, Dhruv Chaddha, Tanish Ganeriwala, Yamini Mookherjee, Pujon Chatterjee, Senior Advocate Anindya Kr. Mitra, Senior Advocate Soumya Majumder, Puspal Chakraborty, Sanjukta Dutta, Aman Agarwal, Priyanka Ganguly, Biswaroop Bhattacharya, Arik Banerjee, Vishwarup Acharyya and Anusmita Bhattacharya.

For Respondents: Senior Advocate Jishnu Saha, Senior Advocate Sakya Sen, Advocates Rishav Banerjee, Ishan Saha, Shiv Ratan Kakrania, Tanuj Kakrania, Kiran Sharma, Shreya Goenka, Surabhi Mehta, Shadna Manzar, Senior Advocate Jishnu Chowdhury, Vikram Wadhera and Yubaraj Bhattacharyya.

For SFIO: Advocates Aparna Banerjee, Tirtha Pati Acharyya