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TMI Blog1980 (9) TMI 201X X X X Extracts X X X X X X X X Extracts X X X X ..... ave carefully considered the said document and have come to the conclusion that it contains communications made in official confidence and I consider that public interest would suffer by their disclosure for the reasons stated hereinafter. 3. In this connection, it is respectfully submitted that the inspection report represents only the inspector's views without reference to any possible explanations of the company concerned and are therefore one-sided. Further the opinion given in the report are neither binding on the Government nor on companies and such reports are treated as confidential. The inspector's report is not even evidence of authoritative opinion, has no evidentiary value except for what the inspector might have stated and to make it public may also affect the follow-up action by the department. Moreover, if the inspection reports are made public, it will result in a situation where the inspectors will not express their free and frank opinion and the inspection will not be effective or purposeful. 4. I, therefore, claim privilege under section 124 of the Indian Evidence Act, 1872." I have heard Mr. V.K. Burman and Mr. Raja Ram Agarwal, counsel for the petitioner- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ument in appropriate cases. In the case of S.B. Choudhury v. J.P. Changkakati, AIR 1960 Assam 210, it was ruled that the court has no power to inspect the document if it refers to the affairs of the State but should decide the matter by looking into the other circumstances and before ordering production of the document. But the same is not the position in respect of a document in respect of which privilege is claimed under section124 of the Evidence Act. Here the document can be inspected by the court to find out if the disclosure thereof would affect public interest. Mr. V.K. Burman has submitted to the court the report of the inspection under section 239 of the Companies Act in a sealed envelope. Before the court looks into that document it will be necessary to consider a few facts. The petitioner-company has filed the present application under sections 397/398 of the Companies Act praying for an investigation into the affairs of the respondent-company and for passing appropriate orders so that the affairs of the respondent-company be conducted in accordance with law. The Company Law Board was also seized of a proceeding under section 408 of the Companies Act. It appears th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g the investigation. Such a report may not be on the basis of the accepted position. There may be serious objections to the contents of the report by the company concerned. It may be that the report is not accepted by the Central Govt. Such a report does not become evidence in a case until the inspector is examined. At best it is only an expression of opinion by a particular inspector. It is true that the investigations are done by the inspector in pursuance of an order of the Central Govt. and in the course of his duty, but that does not make the contents of the report to be gospel truth. It has to be sifted, examined and put to the officials of the company and then the Government may make use of it. Such a report will certainly include particulars of one or more transactions entered into by the company. It is possible that the Central Govt. may launch proceedings against the company and its officials based on the report of the inspector after corroboration. It is possible for the Central Govt. to direct the inspector to carry out a further investigation based on his report. It is also possible for the Central Govt. to direct further investigation in relation to such transactions ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the document. If the document relates to the affairs of the State the court has to leave it to the head of the department to decide whether he should permit its production or not, and, only if it is found that it does not relate to an affair of the State then the claim of privilege has to be rejected. In the case of Amur Chand Butail v. Union of India, the court was considering the claim of privilege under section 123 of the Evidence Act, for a document relating to the affairs of the State and the nature and the extent of enquiry which the court could hold. The claim was rejected on the ground that the affidavit in support of the claim of privilege failed to satisfy that the disclosure of the document would lead to public injury. In my opinion, therefore, this decision is also of no assistance in the present case. In the case of State of U.P. v. Raj Narain, AIR 1975 SC 865, the Supreme Court was also considering a case under sections 123 and 162 of the Evidence Act. The court laid down the foundation of the law behind sections 123 and 162 of the Evidence Act in the following words (p. 875): "It is that injury to public interest is the reason for the exclusion from d ..... X X X X Extracts X X X X X X X X Extracts X X X X
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