1969 (7) TMI 47 - HC - Companies Law

Issues Involved:
1. Discharge or variation of orders made by the registrar.
2. Examination of the applicants under section 268 of the Companies Act, 1948.
3. Production of documents under section 268(3) of the Companies Act, 1948.
4. Procedural propriety and verification of the liquidator's statement.
5. Discretionary powers of the judge versus the registrar.
6. Necessity of written questions before oral examination.

Detailed Analysis:

1. Discharge or Variation of Orders Made by the Registrar:
The applicants sought to discharge or vary two orders made by the registrar on March 7 and May 13, 1969. The March 7 order allowed the liquidator to examine the applicants under section 268 of the Companies Act, 1948. The May 13 order dismissed the applicants' request to stay proceedings until written questions were answered. The judge emphasized that before any appeal against a registrar's order, such an order should be drawn up to clarify what is being contested.

2. Examination of the Applicants Under Section 268 of the Companies Act, 1948:
Section 268 allows the court to summon any officer of the company or any person capable of providing information about the company's affairs. The applicants were to be examined concerning hire-purchase agreements assigned to Capital by Rolls Razor Ltd. The judge affirmed that the liquidator's statement, though not disclosed to the applicants, justified the need for their examination, emphasizing that the section grants extraordinary inquisitorial powers to the court.

3. Production of Documents Under Section 268(3) of the Companies Act, 1948:
The applicants contended that they should not be required to produce documents belonging to the company. The judge noted that the registrar's order did not explicitly mention document production under subsection (3). Consequently, any requirement for document production was struck out from the order, as the liquidator did not defend this part of the order.

4. Procedural Propriety and Verification of the Liquidator's Statement:
The liquidator's statement had not been verified by affidavit, which is typically required when the liquidator is not an officer of the court in a voluntary winding up. The judge allowed the liquidator to file an affidavit verifying the statement, adhering to the principle that secrecy should not undermine procedural propriety.

5. Discretionary Powers of the Judge Versus the Registrar:
The judge clarified that the discretion to discharge or vary the registrar's order lies with the judge, who must exercise it de novo. The judge is not bound by the registrar's decision but should give due weight to the liquidator's views. This ensures that the judge's discretion is unfettered, maintaining the integrity of judicial review within the High Court.

6. Necessity of Written Questions Before Oral Examination:
The applicants argued for written questions before oral examination to avoid oppression. The judge ruled that there is no universal rule mandating written questions first. The court must consider each case's facts to determine the best course of action. In this case, the judge found that an oral examination without prior written questions was appropriate, given the complexity and importance of the liquidation.

Conclusion:
The judge dismissed the motion to discharge or vary the registrar's orders, subject to the liquidator filing an affidavit verifying his statement. The judge emphasized the extraordinary nature of section 268, the discretion vested in the judge, and the need to prevent the section's oppressive or unfair use. The requirement for document production was struck out, and the necessity for oral examination without prior written questions was upheld.

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