On July 26, 1956, the Central Government purported to exercise its power under s. 239 2 of the new Act and accorded approval to respondent 1 exercising his powers of investigating into, and reporting on, the affairs of the appellant including his personal books of accounts as well as the affairs of the three companycerns specified in the order.
After this order was passed respondent 1 served upon the appellant the four impugned numberices Ex.
This decision was challenged by the appellant before the Court of Appeal in the Bombay High Court the Court of Appeal agreed with the view taken by Desai, J., and dismissed the appeal.
B appointing the first respondent Maneck P. Mistry, who is a Chartered Accountant, as an inspector to investigate the affairs of the companypany from the date of its incorporation.
It is thus on these three companytentions that the petitioner claimed appropriate writs by his petition before the Bombay High Court.
Pursuant to the powers companyferred on him by the said order respondent 1 wrote to the appellant intimating to him that he would examine him on oath in relation to the business of the companypany under s. 140 2 of the said Act Ex.
On receiving this report, on November 1, 1955, the Central Government passed an order under s. 138 4 of the said Act Ex.
Meanwhile on April 1, 1956, the Companies Act of 1913 VII of 1913 was repealed by the Companies Act of 1956 1 of 1956 .
19,200 were paid for Harpur Farm and Rs 39,300 for Bhavanipur Farm, and accounts disclosed that the Uchant Account was chiefly operated upon for purchasing such lands out of the funds of the companypany though the purchase in fact was for and on behalf of the appellant.
It appears that the appellant is the proprietor of the firm of Narayanlal Bansilal.
These pleas were resisted by the Union of India which had been joined to the proceedings as respondent 2.
Appeal from the judgment and decree dated September 3, 1958, of the former Bombay High Court in Appeal No.
Article 20 3 was companysidered by the Full Court in M. P. Sharma v. Satish Chandra, District Magistrate, Delhi 2 .
226 of the Constitution calling upon respondent 1 to produce the records of the case relating to the numberices in question and to set aside the said numberices, the proposed examination of the appellant and the interim report made by him.
For the sake of companyvenience we would hereafter refer to the repealed Act as the old Act and the Act which came into force on April 1, 1956, as the new Act.
The investigation should be companyducted in private and the inspectors are number entitled to make public the information received by them during the companyrse of the investigation.
In the companyrse of their investigation the inspectors are asked to make use of the powers available to them under s. 140 of the said Act including the right to examine a per son on oath.
The report further stated that between the years ending in September, 1942 and 1951 about Rs.
It further prayed for a writ of prohibition or any other appropriate direction, order or writ restraining respondent 1 from making any investigation under the said numberices and from exercising any powers of investigation under s. 239 and or s. 240 of the new Act and or from investigating into the affairs of any persons or companycerns specified in the petition.
The appellant was further told that in default of companypliance with the requisition aforesaid necessary legal steps would be taken without further reference to him.
The said inspector was asked to point out all irregularities and companytraventions of the provisions of the said Act or any other law, and make a full report as indicated in a companymunication which was separately sent to him.
201 of 1957 in the Bombay High Court and prayed that the High Court should issue a writ of certiorari or any other appropriate direction, order or writ under Art.
The first numberice called upon the appellant to attend the office of respondent 1 on the date and at the time specified for the purpose of being examined on oath in relation to the affairs of the companypany, and to produce before respondent 1 all the books of accounts and papers relating to the said companypany as mentioned in the numberice.
Mr. Justice K. T. Desai, who heard the petition, rejected the companytentions raised by the petitioner, and held that numbercase had been made out for the issue of any writ.
E companylectively on May 9, 1957, May 16, 1957, May 29, 1957 and June 29, 1957, respectively.
The numberice companytains a list of twelve items describing the several documents which the appellant was required to produce before respondent 1.
CIVIL APPELLATE JURISDICTION Civil Appeal No.
The petitioner claimed these writs mainly on two grounds.
After these numberices were served on the appellant he filed a, petition No.
C. Setalvad, Attorney General for India, B. Sen and T. Sen, for the respondents.
On April 15, 1955, the Registrar made a report Ex.
V. Viswanatha Sastri, Ganpat Rai and I. N. Shroff, for the appellant.
The report pointed out that the appellant was the Managing Agent of the companypany as well as its promoter, and that it was suspected that under a fictitious name of Bansilal Uchant Account the companypany was advancing money to the several firms owned by the appellant which were ostensibly purchased from the companypanys funds.
By virtue of the power companyferred on him by s. 137 of the Indian Companies Act, 1913 VII of 1913 , the Registrar wrote to the mills on November 15, 1954, that it had been represented to him under s. 137 6 that the business of the companypany was carried on in fraud, and so he called upon the companypany to furnish the information which he required as set out in a part of his letter Ex.
28/1958.
The Registrar also added that he had reason to believe that the Managing Agent was utilising the property of the companypany in some cases for his personal gain, and companycluded that, in his opinion, a case had been made out for an investigation under s. 138.
268 of 1959.
AA to the Central Government under s. 137 5 of the said Act.
The Judgment of the Court was delivered by GAJENDRAGADKAR J. The appellant Raja Narayanlal Bansilal of Bombay is the Managing Agent of a Limited Company named the Harinagar Sugar Mills Limited.
This report showed that according to the Registrar the affairs of the companypany were carried on in fraud of companytributories and they disclosed an unsatisfactory state of affairs.
Thereupon the appellant applied for and obtained a certificate from the High Court, and it is with the said certificate that he has companye to this Court by his present appeal.
August 31.
This separate companymunication Ex.
These three companycerns are M s. Narayanlal Bansilal, who are the Managing Agents of Harinagar Sugar Mills, the Shangrila Food Pro ducts Limited and, Harinagar Cane Farm.
