Case: Official Liquidator, Popular Bank Ltd Vs. Madhava Naik &amp; Others

2. The application by the liquidator to the learned Single Judge on the face of it stated that it had been made under S.478, 531, 538, 539 and 541 to 545 of the Companies Act and S.45G, 45H and 451 of the Banking Companies Act. Various allegations of misfeasances and malfeasances were made against the nine officers in that application and in the end it was stated in Para.19 that "From the facts stated above, it appears that1 to 8 and 12 to 16 are guilty or privy to acts of fraud, misfeasance, breach of trust and misappropriation and falsification of accounts in relation to the affairs of the Company under S.538 (i) and 0), 539 (b), 542 and 543 of the Companies Act I of 1956". The1 to 8 and 12 are the nine officers against whom the impugned order for public examination had been made. It is necessary to set out two of the prayers in the application as arguments have been based on them. They are "(a) By virtue of the powers under S.477 and 478 of the Companies Act I of 1956 and S.45G of the Banking Companies Act, to summon before it theIt appears that on June 13, 1958 the learned Single Judge before whom the application had been moved made an order stating that it was not proper to make an application combining together so many different sections of the two Acts and directing that the application "be treated as a report under S.455 (2) of the Companies Act & S.45 G of the Banking Companies Act & the court Liquidator will be at liberty to make separate applications for such other reliefs as he seeks." It does not appear from the record whether any such separate application had been made.of the order was to confine the application to prayer (a) only and it was in terms of it that the impugned order was made.4. The only question argued at the Bar was whether the order for public examination was void as offending Art.20(3) of the Constitution which says that "No person accused of any offence shall be compelled to be a witness against himself." On this question the learned Single Judge held that the article was not violated as the persons directed to be publicly examined had not been accused of any offence. The learned judges of the appellate bench allowed the appeals taking the view that the nine officers must be said to have been accused of various offences under S.538, 539 and 541 of the Companies Act as in spite of the order of June 13, 1958 the application containing allegations of commission of such offences by them as also prayer (d) asking for their prosecution and trial in respect of them, remained on the record of the Court and that prayer could be pressed as soon as the public examination washowever expressly left open the question whether an order for public examination under S.478 of the Companies Act or S.45G of the Banking Companies Act would offend Art.20(3) even in the absence of such accusation.

Court's reasoning:
5. We think that the matter is concluded by the recent judgment of this Court in K. Joseph Augusthi v. Official Liquidator 1964 KLT. 267 . It was there held that S.45G of the Banking Companies Act did not offend cl. (3) of Art.20 of the Constitution and no order for public examination under it could violate that clause as there could be no accusation in a proceeding under the section resulting in an order for public examination. This judgment would appear to answer the question which the learned judges of the appellate bench intended to keep open. The effect of this decision on the present case will become clearer if the terms of twoof S.45G arewould follow that even if the application in the present case had contained allegations of the commission of offences under S.538,539 and 541 of the Companies Act, as the appellate bench thought it did, that would not amount to an accusation within Art.20 (3). We, therefore, think that the view taken by the appellate bench was erroneous and cannot be supported. We should point out that the learned judges of that bench did not have the judgment in K. Joseph Augusthis case (1964 KLT. 267)  before them when they decided the matter.Learned counsel for the respondents sought to distinguish K. Joseph Augusthis case from the present one on two grounds. First he said that K. Joseph Augusthis case, supra, was concerned with S.45G of the Banking Companies Act only whereas in the present case the order had been made under S.478 of the Companies Act also.This no doubt is true. But that does not in our opinion make any difference. We think that for the present purpose, that is to say, for deciding whether an accusation was made or not, the two sections are indistinguishable. Under S.478 of the Companies Act where a report made by the liquidatorwhich is done under S.455We are unable to accept this contention. First we think it extremely doubtful if the appellate bench was right in stating that the prayer (d) remained in the application in spite of the order of the learned Single Judge of June 13,1958 to which we have earlier referred. It seems to us that the correct view to take is that as a result of that order a relief on the terms contained in prayer (d) could not be asked on that application and the liquidator had to make an independent application for it. If the prayer was not there, K. Joseph Augusthis case cannot be distinguished on the basis of it. Secondly that prayer was, in any event, not under S.45G of the Banking Companies Act nor under S.478 of the Companies Act and, for proceedings under either of those two sections that prayer was of no effect. It can be treated as if it> had not been made. For the purpose of action under S.545 of the Companies Act and S.45J of the Banking Companies Act it is not essential that a public examination should first be held either under S.478 of the Companies Act or S.45G of the Banking Companies Act. Therefore public examination under S.478 of the Companies Act and S.45G of the Banking Companies Act have no concern with proceedings under S.545 of the Companies Act and S.45J of the Banking Companies Act. A prayer for action under S.545 of the Companies Act & S.45J of the Banking Companies Act cannot hence amount to accusation under Art.20 (3) for the purposes of orders for public examination under S.478 of the Companies Act or S.45G of the Banking Companies Act. We think it right also to express our doubt if an application for orders under S.545 of the Companies Act or S.45G of the Banking Companies Act can be said to be accusation at all. It is at least arguable that it is only after orders under them have been made that the accusation, if any, comes.