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TMI Blog1964 (8) TMI 39X X X X Extracts X X X X X X X X Extracts X X X X ..... he Banking Companies Act it is not essential that a public examination should first be held either under section 478 of the Companies Act or section 45G ofthe Banking Companies Act. Therefore, public examination under section 478 of the Companies Act and section 45G of the Banking Companies Act have no concern with proceedings under section 545 of the Companies Act and section 45J of the Banking Companies Act. A prayer for action under section 545 of the Companies Act and section 45 J of the Banking Companies Act cannot hence amount to accusation under article 20(3) for the purposes of orders for public examination under section 478 of the Companies Act or section-45G of the Banking Companies Act. Appeal allowed. - 603 TO 608 OF 1961 - - - ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat counter-petitioners Nos. 1 to 8 and 12 to 16 are guilty or privy to acts of fraud, misfeasance, breach of trust and misappropriation and falsification of accounts in relation to the affairs of the company under sections 538( i ) and ( j ), 539( b ), 542 and 543 of the Companies Act (I of 1956)". The counter-petitioners Nos. 1 to 8 and 12 are the nine officers against whom the impugned order for public examination had been made. It is necessary to set out two of the prayers in the application as arguments have been based on them. They are : "( a ) By virtue of the powers under sections 477 and 478 of the Companies Act (I of 1956) and section 45G of the Banking Companies Act, to summon before it the counter-petitioners and publicly exami ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dge held that the article was not violated as the persons directed to be publicly examined had not been accused of any offence. The learned judges of the appellate bench allowed the appeals taking the view that the nine officers must be said to have been accused of various offences under sections 538, 539 and 541 of the Companies Act as in spite of the order of June 13,1958, the application containing allegations of commission of such offences by them as also prayer ( d ) asking for their prosecution and trial in respect of them, remained on the record of the court and that prayer could be pressed as soon as the public examination was over. They (however) expressly left open the question whether an order for public examination under section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ic examination' of the person concerned as to matters mentioned in it. It would appear from the underlined portion of sub-section (1) that the person contemplated in it can include an allegation of fraud committed by a person mentioned in it if the liquidator is of opinion that such fraud was committed. There is no doubt that the decision in K. Joseph Augusthi's case ( supra ) would apply even to a case where there is such an allegation of fraud because it applies to all cases coming under section 45G including such a case. Since K. Joseph Augusthi's case ( supra ) has held that no order under section 45G of the Banking Companies Act can offend clause (3) of article 20 of the Constitution, an order under that section cannot do so ev ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ish K. Joseph Augusthi's case ( supra ) from the present one on two grounds. First he said that K. Joseph Augusthi's case ( supra ) was concerned with section 45G of the Banking Companies Act only whereas in the present case the order had been made under section 478 of the Companies Act also. This no doubt is true. But that does not in our opinion make any difference. We think that for the present purpose, that is to say, for deciding whether an accusation was made or not, the two sections are indistinguishable. Under section 478 of the Companies Act where a report made by the liquidator which is done under section 455 states that a fraud has been committed by any person in regard to the affairs of the company, the court may direct th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as not there, K. Joseph Augusthi's case ( supra ) cannot be distinguished on the basis of it. Secondly, that prayer was, in any event, not under section 45G of the Banking Companies Act nor under section 478 of the Companies Act and, for proceedings under either of those two sections, that prayer was of no effect. It can be treated as if it had not been made. For the purpose of action under section 545 ot the Companies Act and section 45J of the Banking Companies Act it is not essential that a public examination should first be held either under section 478 of the Companies Act or section 45G ofthe Banking Companies Act. Therefore, public examination under section 478 of the Companies Act and section 45G of the Banking Companies Act have ..... X X X X Extracts X X X X X X X X Extracts X X X X
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