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Issues Involved:
1. Jurisdiction of the petitioning creditor to apply for examination under section 195 of the Indian Companies Act, 1913. 2. Violation of rule 197 of the Company Rules regarding attendance at the examination. 3. Specification of points for examination in the summons. Detailed Analysis: 1. Jurisdiction of the Petitioning Creditor: The appellant argued that under section 195 of the Indian Companies Act, 1913, read with rule 195 of the Company Rules, only the official liquidator could make an application for examination, making the petitioning creditor's application incompetent and the court's order for examination void. The court examined section 195, which grants the court the power to summon any person capable of giving information concerning the company's trade, dealings, affairs, or property. The court noted that section 195 does not specify that only the official liquidator can make such an application. Historically, both liquidators and creditors could apply for examinations. Rule 195, introduced in 1939, specified that applications should be made by the official liquidator, but the Companies (Court) Rules, 1959, clarified that applications could also be made by others with notice to the official liquidator. The court concluded that rule 195 did not intend to exclude creditors from making applications and upheld the jurisdiction of the petitioning creditor to apply for examination. 2. Violation of Rule 197: The appellant contended that rule 197 was violated as persons other than the liquidator, the advocate or attorney employed by him, and the person to be examined were allowed to attend the proceedings. Rule 197 states that no person except the liquidator, his advocate or attorney, and the person to be examined shall be "entitled" to attend. The court interpreted this to mean that while these individuals have a legal right to be present, the court retains the discretion to allow others to attend. The court referenced the English case In re Greys Brewery Co., where it was held that creditors could be allowed to attend examinations at the court's discretion. The court concluded that rule 197 did not remove the court's discretion to permit attendance by the creditor who made the application, especially when the official liquidator showed no interest. 3. Specification of Points for Examination: The appellant argued that the summons should have specified the points upon which the examination would be directed. The court noted that the relevant form (Form No. 68) does not require specifying points. The court emphasized that the examination under section 195 is intended to gather information for the liquidation proceedings and is not meant to be an inquisition or a fishing expedition. The court required the creditor's counsel to specify the headings for the examination, which included mortgages, accounts of dealings and transactions between the company and certain firms, machinery and assets, and other related matters. The court directed that the examination be confined to these specified points. Additional Safeguards and Conclusion: The court acknowledged the appellant's concern about the creditor having legal representation while he did not. The court ruled that the appellant would be entitled to the presence of his lawyers during the examination to assist in keeping the examination within the bounds prescribed by the court. However, neither side's lawyers would have the right of general address. If the creditor agreed not to have his lawyer present, the officer conducting the examination could exclude the presence of lawyers altogether. Final Judgment: The appeal succeeded in part. The court sustained the lower court's order but added that the examination would be confined to the specified headings and allowed the appellant the presence of his lawyers during the examination. Each party was ordered to bear their own costs of the appeal. The judgment was certified for two counsel.
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