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TMI Blog1961 (12) TMI 39X X X X Extracts X X X X X X X X Extracts X X X X ..... and place the following books and papers, mentioned in schedule B to the order, viz., ( a )Ballygunge Estate (Private) Ltd. cash books, general ledger, journal, minutes books from 1939 to 1948, property register ; ( b )Ballygunge Building Society Private Ltd. cash books, general ledger, journal, minute books, property register ; ( c )Ballygunge Real Property Building Society Ltd. (in liquidation) -general ledger for 1949 ; and "all such other books, papers, deeds, writings, and other documents in his custody or power in any way relating to the affairs of the company." This order was published in public newspapers. The solicitors of the appellant by letters dated February 29, 1960, and March 10, 1960, called upon the official liquidator to furnish them with copies of the petition and the report on the basis of which the order wad made. The official liquidator having informed the solicitors of the appellant that the latter were not entitled to a copy of the report of the official liquidator, the appellant applied by a judge's summons for an "order recalling, vacating, setting aside or modifying" the order dated January 18, 1960, and for a direction to the official liq ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ice Law rejected the application filed by the appellant, holding that the order dated January 18, 1960, was final and that he had no power to review, modify, alter or vary the same, that the order merely summoning for examination under section 477 of the Companies Act did not affect a party's rights, there being no charge, no complaint and no allegation against him. The learned judge observed that it was not necessary for the court in the first instance to determine that the person called upon to furnish information actually possessed that information : if the court has reasons to think, or if even an allegation is made that a certain person is in possession of information which would be of use in the course of winding up, the court can call upon him to appear in court and examine him, and that rules 243(1) and 243(2) of Companies (Court) Rules laid down the same procedure as was laid down in In re Gold Company [1879] 12 Ch. D. 77, 82, and different from the procedure which was laid down by Rule 195 of the Indian Companies Act, 1913. In the view of the learned judge the statement of the official liquidator on which the order dated January 18, i960, was made not being on oath or a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pected to be indebted to the company, or any person whom the court deems capable of giving information concerning the promotion formation, trade, dealings, property, books or papers, or affairs of the company. (2) The court may examine any officer or person so summoned on oath concerning the matters aforesaid, either by word of mouth or on written interrogatories; and may, in the former case, reduce his answers to writing and require him to sign them. (3) The court may require any officer or person so summoned to pro duce any books and papers in his custody or power relating to the company ; but, where he claims any lien on books or papers, produced by him, the production shall be without prejudice to that lien, and the court shall have jurisdiction in the winding up to determine all questions relating to that lien. (4) If any officer or person so summoned, after being paid or tendered a reasonable sum for his expenses, fails to appear before the court at the time appointed, not having a lawful impediment (made known to the court at the time of its sitting and allowed by it), the court may cause him to be apprehended and brought before the court for examination. (5) If, on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nds relied on in support of the summons." "244. Directions at hearing of summons. Upon the hearing of the summons the Judge may, if satisfied that there are grounds for making the order, make an order directing the issue of summons against the person named in the order for his examination and/or for the production of documents. Unless the Judge otherwise directs, the examination of such person shall be held in Chambers. The order shall be in Form No. 110." "249. Order for public examination under section 478. (1) Where an order is made for the examination of any person or persons under section 478, the examination shall be held before the Judge; provided that in the case of a High Court, the Judge may direct that the whole or any part of the examination of any such person or persons, be held before any of the officers mentioned in sub-section (10) of the said section as maybe mentioned in the order. Where the date of the examination has not been fixed by the order, the official liquidator shall take an appointment from the Judge or officer before whom the examination is to be held as to the date of the examination. The order directing a public examination shall be in Form ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 90] 45 Ch. D. 87 (CA) , Lord Justice Cotton vacated an order in appeal, where the order for examination was not made in the interest of the company in liquidation, but was made with a view to assist the interest of the company in prosecuting an action which has been brought up by the liquidator. In that case the liquidator filed with leave of the court an action against another company for setting aside an agreement of purchase and obtained an order for affidavit of documents, but the court refused to order production of certain documents, or the examination of the defendant company's secretary on interrogatories, on the ground that discovery was premature. The liquidator then obtained an order under section 115 of the Companies Act, 1862, for the examination of the secretary before an examiner. The secretary refused to answer certain questions relating to the matters in issue in the action and the court held that the liquidator had shown no reason for seeking discovery except to assist him in the action and so to evade the order of the judge postponing discovery in the action and therefore the witness was justified in refusing to answer the question. Lord Justice Bowen in that ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r for examination was per se oppressive or vexatious. This is not a case in which the order is sought to facilitate the progress of an action filed by the official liquidator against the appellant, nor is there reason to hold that the order is sought in aid of some collateral purpose a purpose other than effective progress of the winding up in the interest of the company. The appellant was for many years a director of the company, and, therefore, concerned with guiding the affairs of the company. He was prima facie a person who would be able to give information likely to promote the purpose of the winding up. It appears also that Mr. Justice Mitter was satisfied on the statement filed by the official liquidator that the appellant had the custody of certain important books of the company. The plea of the appellant that compelling him to submit to examination without permitting him to have access to the books before answering questions put to him is oppressive has no substance. The affidavit filed on behalf of the liquidator clearly states that the relevant records of the company will be made available to the appellant at the time of the examination. The High Court, in appeal, ex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nsaction was fraudulent; if it is proved to be so we shall get a large sum of money; will you let me lay out a small sum of money in order to examine a witness or two, so as to ascertain the facts ?' In that case the court will exercise a discretion." Mr. Justice Mitter was the company judge in charge of the liquidation proceedings of the company. Before him a statement of the official liquidator was produced : and in the light of the materials placed before him, he passed the order which is now sought to be modified. This court cannot proceed upon an assumption that the order for examination of a person who has ceased to be a director prior to the date of the winding up must necessarily be regarded as oppressive or vexatious. A director of a company, past or present, is ordinarily in a position to give useful information about the affairs of the company in winding up. In the circumstances, we think that the High Court was right in holding that no case was made out for modification of the ex parte order. Two grounds were set up in support of the plea that the appellant before he is examined is entitled to inspect the statement of the official. liquidator: ( a ) that it is contr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under section 477 being intended to be commenced only in the interest of the company and for the purpose of collecting evidence for the effective prosecution of the liquidation are by rules expressly to be commenced by order which may, on the application of the official liquidator, be made ex parte. The order does not purport to decide any question in dispute between the company and the persons sought to be examined. It is only issued upon the satisfaction of the court that the person should be examined in the interest of the company, it appearing to the court just and proper that he should be so examined. There is nothing in the scheme of the Act which indicates that an order passed for the examination of a person under section 477 may be made only after serving a notice upon such person : the Rules expressly contemplate that the order may be made ex parte. Rules of natural justice are therefore not violated merely by the issue of an order requiring a person or persons to appear before a court for his examination under section 477. Nor do the rules of procedure framed by this court for examination under section 477 contemplate any right of inspection of the statement of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the same document. The petition has, it is true, to be supported by a statement, but the statement is independent of the petition. It appears that the practice of the Calcutta High Court prior to the promulgation of the Companies (Court) Rules was different. Under rule 195 an application for examination of a person under section 195 of the Indian Companies Act, 1913, could be made ex parte to the judge but it had to be by petition verified by the official liquidator stating the facts upon which the application was based. It was also provided that at the hearing, the judge may, if satisfied that a prima facie case for examination had been made out, direct the issue of a summons or summonses against the person or persons named in the order for examination and/or for the production of the documents. Manifestly, the order could be obtained on a petition which was required to be verified by the official liquidator and there had to be formal hearing and only if a prima facie case for hearing had been made out the order could be made. Under the Companies (Court) Rules a different practice, which approaches the practice prevailing in the English courts has been set up. The mere f ..... X X X X Extracts X X X X X X X X Extracts X X X X
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