1956 (8) TMI 20 - HC - Companies Law

Summary

Issues Involved:
1. Legality of the petitioner's arrest and subsequent investigation.
2. Jurisdiction of the police to investigate the alleged offences.
3. Applicability of Section 630 of the Companies Act, 1956, as a bar to criminal investigation.
4. Validity of the Registrar's actions in initiating the investigation.

Detailed Analysis:

1. Legality of the Petitioner's Arrest and Subsequent Investigation:
The petitioner was arrested at Bombay on 29th October, 1955, without a warrant and was subsequently released on bail. The petitioner claimed ignorance of the charges at the time of arrest. The arrest was not directly linked to the letter dated 8th June, 1955, from the Registrar, which was treated as a complaint for police investigation. The court noted that the arrest and its circumstances were not essential for the disposal of the petition.

2. Jurisdiction of the Police to Investigate the Alleged Offences:
The court proceeded on the basis that the letter from the Registrar dated 8th June, 1955, was a valid complaint under the Criminal Procedure Code. The offences alleged (under sections 406, 409, and 477A of the Indian Penal Code) are cognizable, allowing the police to arrest without a warrant. Section 154 of the Criminal Procedure Code mandates that any information relating to a cognizable offence must be recorded and investigated by the police. The letter satisfied the requirements of Section 154 and was registered accordingly. Sections 156(1) and 157(1) of the Criminal Procedure Code authorize police officers to investigate cognizable offences without a Magistrate's order if they suspect such an offence has been committed.

3. Applicability of Section 630 of the Companies Act, 1956, as a Bar to Criminal Investigation:
The petitioner argued that Section 630 of the Companies Act barred police investigation into the company's affairs. The court clarified that Section 630 provides a summary remedy for wrongful withholding of company property and does not bar criminal proceedings for offences like those under sections 406 and 409 of the Indian Penal Code. The section is confined to officers or employees of the company and does not preclude the State from prosecuting offences against the public interest.

4. Validity of the Registrar's Actions in Initiating the Investigation:
The Registrar's letter dated 8th June, 1955, requested police investigation into suspected offences under sections 406, 409, and 477A of the Indian Penal Code. The court held that even if the Registrar acted outside his statutory duties, he was entitled as a citizen to report suspected offences to the police. The court found no illegality in the Registrar's actions, and the letter was considered a valid complaint under Section 154 of the Criminal Procedure Code.

Conclusion:
The court dismissed the petition, holding that the third respondent (Inspector of Police, Criminal Investigation Department) had the jurisdiction to investigate the alleged offences. The petitioner's request for a writ of prohibition was denied, as the investigation was deemed lawful and within the statutory duties of the police. The rule was discharged, and the petition was dismissed with no order as to costs.