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TMI Blog1967 (8) TMI 76X X X X Extracts X X X X X X X X Extracts X X X X ..... were bent upon enriching themselves by making secret profits much to the detriment of the shareholders. Whilst this petition was pending, O. P. No. 272 of 1952 was filed by one of the members of the company under section 153C of the old Act, inter alia, for appointing an administrator to carry on the business of the company and for termination" of the services of the directors who were by then functioning. The above petitions and another application in the same proceedings, with which we are not concerned, came up for final hearing before Ramaswami Gounder J., who by his order dated July 27, 1953, appointed administrators for the company till April 30, 1955, and directed that the board of management should go out of office forthwith. He also dismissed 0. P. No. 79 of 1951 which was the original petition for winding up. In the decretal order drafted, clause 9 provides : "That there be no further orders in O.P. No. 272 of 1952 and the same be and is hereby closed. " As the administrators appointed could not complete the administration within the time granted, Application No. 463 of 1957 was taken for their discharge. Subramaniam J. by his order dated February 27, 1958, considered t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct and amongst other sections, he made express reference to sections 235, 237 and 242. He was of the view that the materials placed before him were abundant and extensive for making out a case for ordering investigation into the affairs of the company by the machinery provided under the new Act. Though no specific mode or procedure is prescribed as to the method to be adopted by courts in enquiries against delinquent directors, whether it be under section 397 or 398 or under section 543, yet this court had often taken up the burden of enquiry into such matters itself, by directing the master of this court to enquire into it after giving full opportunity to all the concerned parties. In fact, in accordance with the practice of this court, the master used to examine the witnesses, admit documents on proof and send up all the records to court for further hearing. Curiously enough, the course adopted by Ramaswami J. was a departure from the normal. In this case, the learned judge, apparently in exercise of his inherent jurisdiction under rule 9 of the Company (Court) Rules, 1959, made an order under section 237 of the new Act and directed the Central Government to appoint an inspector ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... malfeasance of such persons in management during the relevant period. Mr. Rajappa, appearing for the 1st respondent, took me through the scheme of the Act relating to the investigation of the affairs of a company and submitted that the applicant has no present right to seek any further remedy in the hands of this court and his request for a further probe into the matters and for a practical confirmation of the report of the inspector so as to result in a decree against one or the other of the respondents is not a relief which he could secure from this court at this stage. Mr. M. A. Rajagopalan, appearing for respondents Nos. 3 and 4, whilst supporting the 1st respondent adds that even if any such claim can be enquired into at this stage by this court, it is barred by limitation. Both the counsel appearing for the respondents have requested this court to take up those preliminary objections as above before going into the merits of the case. They crave leave to address arguments on the facts, if ultimately this court is of the view that their preliminary objections are unsustainable and have no legs to stand. The scheme of the new Act, in so far as it conerns an investigation of a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the company in that behalf. Section 245 relates to expenses of investigation and section 246 provides that the report of the inspector shall be admissible in any legal proceedings as evidence of the opinion of the inspector. Sections 247 to 250, which also branch out from the investigation conducted by an inspector appointed as above, need not be considered in detail in this application as they are not quite relevant. I have already stated that Ramaswami J. directed the appointment of an inspector by the Central Government after having declared that the affiairs of the company ought to be investigated in the manner prescribed by the new Act. A litigant who has come up to court with a definite request and a prayer, cannot be heard to contend that such a relief asked for ordinarily by him is still available to him even though the course of that relief asked for by him was snapped and he was directed to have recourse to other independent reliefs available to him in law and which are equally adequate and efficacious. Whilst disposing of this application, Ramaswami J. formulated the issue with which he was confronted in the said application in the following terms : "In order to have ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... could secure such a relief at all in the absence of the pendency of a petition for the winding-up of the company. But, even if it could be assumed that such an application is entertainable, he was given a relief which was not asked for by him and to which diverted course he had absolutely no objection and it does not lie, therefore, in the mouth of the applicant, after receipt of inspector's report, to ask this court to re-hear the application, when nothing more need be done in the same. The above conclusion of mine can also be reached by applying the provisions of the new Act. When the court by order declared that the affairs of the company ought to be investigated by an inspector and directed the Central Government to appoint an inspector to go into such details, then there is an exhaustion of the jurisdiction of this court in so far as this application is concerned, and it is for the Central Government to take up the matter in their hands after receipt of the report of the inspector and do such things as are necessary and expedient in public interest. Section 242 is a provision which enables the Central Government to prosecute such delinquent officers or persons in management. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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