Company court jurisdiction to direct prosecution upheld where investigation disclosed a prima facie case of grave offences.

Section 477 of the Companies Act does not exclude the company court's inherent powers under Rule 9 of the Companies (Court) Rules where necessary to secure the ends of justice. On the facts, once the investigation report disclosed a prima facie case of grave offences, the court could direct the appropriate authority to proceed further on that material. Such a direction was treated as setting the criminal law in motion, not as an adjudication of guilt or the imposition of punishment, and the jurisdiction to direct prosecution was upheld.

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Issues: Whether the company court had jurisdiction to direct prosecution on the basis of the C.B.C.I.D. report and whether such direction could be sustained under its inherent powers.

Analysis: Section 477 of the Companies Act empowers the court to examine persons suspected of holding company property and, in specified cases, to direct payment or delivery of property. The court held that this provision did not exclude the use of the court's inherent powers under Rule 9 of the Companies (Court) Rules to pass orders necessary for the ends of justice. Once the investigation report disclosed a prima facie case of grave offences, the court was entitled to act on it and direct the appropriate authority to proceed further. Such a direction was treated as setting the criminal law in motion and not as an adjudication of guilt or imposition of punishment.

Conclusion: The company court had jurisdiction to direct prosecution, and the appeal failed.

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