The Company may make an application by passing special resolution

For passing an order for investigation, it is not necessary that a proceeding be pending before the court, even a petition simplicitor can be entertained [Delhi Flour Mills Co. Ltd., In re (1975)].

It has been contended in several cases that the power and discretion of the Government were uncontrolled and the court could direct an investigation whenever it suspected that all was not well with the company, and it was not necessary for the petitioner to prove his allegations before the court for, he could prove them before the Inspectors. However, in Mrs. U.A. Sumathy Vs. Digvijay Chit Fund (P) Ltd. (1983), the High Court observed:

No doubt, clause (a)(ii) of Section 237 does not lay down what circumstances are to be proved before the Court and on what materials, the Court could act but that does not mean that meagre allegations are sufficient. A Court can act only on the materials placed before it and those materials should at least be such as to satisfy the Court that a deeper probe into the company’s affairs is desirable in the interest of the company itself.