Case: Satish Churan Law Vs. H. K. Ganguly

be taken by a witness or any person on his behalf on his giving an undertaking that such notes shall be used only for the purpose of re-examination of the witness. It is also provided that on the conclusion of the examination, the notes shall, unless otherwise directed, be handed over to the Court for destruction. Rule 28 provides, inter alia, that the notes shall not be open to the inspection of any creditor, contributory or other person, except the official liquidator, nor shall a copy thereof or extract there from be supplied to any person other than the official liquidator, save upon orders of the Court. The proceedings for examination under s. 477 being intended to be commenced only in the interest of the Company and for the purpose of collecting evidence for the affective prosecution of the liquidation are by rules expressly to be commenced by order which may on the application of the official liquidator be made ex parte. The order does not purport to decide any question in dispute between the Company and the persons sought to be examined. It only proceeds upon the satisfaction of the Court that the person should be examined in the interest of the Company, it appearing to the Court just proper that he should be so examined. There is nothing in the scheme of the Act which indicates that an order passed for the examination of a person under s. 477 may be made only after serving a notice upon such person : the Rules expressly contemplated that the order may be made ex parte. Rules of natural justice are therefore not violated merely by the issue of an order requiring a person or persons to appear before a Court for his examination under s. 477.Nor do the rules of procedure framed by this Court for examination under s. 477 contemplate any right of inspection of the statement of the official liquidator. As we have already pointed out, r. 243 contemplates an order ex parte and the scheme of the Rule further emphasises the fact that all these enquiries are intended as already discussed to be confidential proceedings. The person whose examination is sought to the held, has therefore no right to inspect the statement made by the liquidator on which the order of the Court proceeds. Rule 360 of the Companies (Court) Rules provides that every duly authorised officer of the Central Government, and, save as otherwise provided by these Rules, every person who has been a director or officer of a company which is being wound up, shall be entitled, free of charge, at all reasonable times to inspect the file of the proceedings of the liquidation and to take copies or extracts from any document therein, and, on payment of the prescribed charges, to be furnished with such copies or extracts. The right to inspection is given in respect of the file of the proceedings of the liquidation. But the statement made by the official liquidator under Rule 243 does not form part of the file of the proceedings of the liquidation. The statement is not to be made on oath : it has to be shown to the Company Judge and the Judge has to apply his mind to the contents thereof, but it does not, as pointed out by Mr. Justice Law, form part of the liquidation proceedings. In the Company (Court) Rules, there is no rule specifying the documents which are to be included in the file of the liquidation proceedings. The order passed by the Court and the summons issued thereon may be regarded as forming part of the file of the proceedings of liquidation, but having regard to the nature of the statement made by the official liquidator on which this Judges order is passed, it is not part of the file of the proceedings of liquidation. The person summoned even if he is an officer or director of the company, is therefore not entitled to inspection thereof relying upon Rule 360.It was urged by counsel for the appellant that the petition for an order under s. 477 was inextricably connected with the statement of the official liquidator, and if the party affected by the order was entitled to inspect the petition, he was entitled to inspect the statement which formed part of the petition. There is however, no warrant for the view that the petition and the statement form part of the same document. The petition has, it is true, to be supported by a statement, but the statement is independent of the petition. 7. It appears that the practice of the Calcutta High Court, prior to the promulgation of the Companies (Court) Rules, was different. Under r. 195 an application for examination of a person under s. 195 of the Indian Companies Act 1913, could be made ex parte to the Judge but it had to be by petition verified by the official liquidator stating the facts upon which the application was based. It was also provided that at the hearing, the Judge may, if satisfied that a prima facie case for examination had been made out, direct the issue of a summons or summonses against the person or persons named in the order for examination and/or for the production of the documents. Manifestly, the order could be obtained on a petition which was required to be verified by the official liquidator and there had to be a formal hearing and only if a prima facie case for hearing had been made out the order could be made. Under the Companies (Court) Rules a different practice, which approaches the practice prevailing in the English Courts has been set up. The mere fact that under r. 195 of the Calcutta High Court Rules under Act of 1913 the appellant might have had a right of access to the statement on which the order was founded will not be an adequate ground for holding that the earlier practice must continue to prevail.

Decision (1 = appeal accepted, 0 = rejected): 0

Explanation:
0[ds]It was never suggested before the High Court that the order was made without considering the material facts and circumstances. The Court has made the order in exercise of the jurisdiction vested in it and in the absence of any material to show that the order was made for a collateral purpose or by misleading the Court, the appellant is not entitled to have the order vacatedThe person whose examination is sought to the held, has therefore no right to inspect the statement made by the liquidator on which the order of the Court proceeds. Rule 360 of the Companies (Court) Rules provides that every duly authorised officer of the Central Government, and, save as otherwise provided by these Rules, every person who has been a director or officer of a company which is being wound up, shall be entitled, free of charge, at all reasonable times to inspect the file of the proceedings of the liquidation and to take copies or extracts from any document therein, and, on payment of the prescribed charges, to be furnished with such copies or extracts. The right to inspection is given in respect of the file of the proceedings of the liquidation. But the statement made by the official liquidator under Rule 243 does not form part of the file of the proceedings of the liquidation. The statement is not to be made on oath : it has to be shown to the Company Judge and the Judge has to apply his mind to the contents thereof, but it does not, as pointed out by Mr. Justice Law, form part of the liquidation proceedings. In the Company (Court) Rules, there is no rule specifying the documents which are to be included in the file of the liquidation proceedings. The order passed by the Court and the summons issued thereon may be regarded as forming part of the file of the proceedings of liquidation, but having regard to the nature of the statement made by the official liquidator on which this Judges order is passed, it is not part of the file of the proceedings of liquidation. The person summoned even if he is an officer or director of the company, is therefore not entitled to inspection thereof relying upon Rule 360.It was urged by counsel for the appellant that the petition for an order under s. 477 was inextricably connected with the statement of the official liquidator, and if the party affected by the order was entitled to inspect the petition, he was entitled to inspect the statement which formed part of the petition. There is however, no warrant for the view that the petition and the statement form part of the same document. The petition has, it is true, to be supported by a statement, but the statement is independent of the petitionIt appears that the practice of the Calcutta High Court, prior to the promulgation of the Companies (Court) Rules, was different. Under r. 195 an application for examination of a person under s. 195 of the Indian Companies Act 1913, could be made ex parte to the Judge but it had to be by petition verified by the official liquidator stating the facts upon which the application was based. It was also provided that at the hearing, the Judge may, if satisfied that a prima facie case for examination had been made out, direct the issue of a summons or summonses against the person or persons named in the order for examination and/or for the production of the documents. Manifestly, the order could be obtained on a petition which was required to be verified by the official liquidator and there had to be a formal hearing and only if a prima facie case for hearing had been made out the order could be made. Under the Companies (Court) Rules a different practice, which approaches the practice prevailing in the English Courts has been set up. The mere fact that under r. 195 of the Calcutta High Court Rules under Act of 1913 the appellant might have had a right of access to the statement on which the order was founded will not be an adequate ground for holding that the earlier practice must continue to prevail.