1983 (12) TMI 241 - HC - Companies Law

Summary

Issues:
- Challenge against legality of summons under section 209A of the Companies Act, 1956
- Scope of inspection of books of account under section 209A
- Application of ejusdem generis principle in determining the type of documents for inspection
- Distinction between inspection under section 209A and investigation under section 237 of the Act

Analysis:
The judgment of the High Court of Kerala involved multiple writ petitions challenging the legality of summons issued under section 209A of the Companies Act, 1956. The petitioners contended that the inspection of books of account by the authorities should be restricted to that of the books of account only. The court examined the provisions of section 209A, emphasizing the duty of directors and officers to produce books of account and other documents during inspection. The court noted the argument that the scope of inspection must be limited to documents with the character of books of account, applying the principle of ejusdem generis. It was held that the inspection under section 209A should not extend to a roving inquiry into all aspects of the company's affairs, distinguishing it from the investigation under section 237 of the Act.

The court acknowledged the argument that inspection should be confined to specific ledgers, documents, and vouchers, and directed that a notice listing the items to be inspected should be served on the company in advance. The judgment outlined directions for the inspection process, including completing the inspection expeditiously and seeking appropriate directions from the company court for inspecting additional books and documents beyond the specified items. The court left open the question of privilege if the inspection exceeded the scope of section 209A and encroached into the realm of investigation under section 237, to be determined based on the facts of the case.

In conclusion, the writ appeal and petitions were disposed of with the outlined directions, emphasizing the limitations of inspection under section 209A and the distinction from the broader investigation provisions of the Act. The judgment did not award costs and allowed for the provision of a carbon copy to the counsel for the Central Government and the petitioners upon request.