Inspection rights of shareholders persist despite directorship; tribunal cannot advise Registrar to initiate prosecution and petition requires fresh adjudication.

A shareholder who also serves as a director retains the statutory right to inspect company records in the capacity of a member; that entitlement is against the company entity and is not negated by directorship, so petitions under the inspection provision are maintainable by such persons. The Company Law Board lacks statutory authority to advise or direct the Registrar of Companies to initiate prosecution or complaint proceedings; adjudicatory functions of the Board are distinct from the Registrar's prosecutorial role. Where a tribunal declines substantive determination and purports to advise prosecution, its order should be set aside and the petition remitted for fresh adjudication.

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Issues: (i) Whether a shareholder who is also a director has locus standi to maintain a petition for inspection under section 163 of the Companies Act; (ii) Whether the Company Law Board has power or jurisdiction in proceedings under sections 163, 621 or 629 to advise the Registrar of Companies to take action under section 629; (iii) Whether the Company Law Board can advise the Registrar of Companies to initiate prosecution for contravention of section 163 when it finds inspection has been refused.

Issue (i): Whether a shareholder-director has locus standi to seek inspection under section 163.

Analysis: The statutory right of inspection in section 163 is conferred on members; the obligation to permit inspection is that of the company as an entity and not of an individual director. The status of being a director does not by itself remove the statutory entitlement of a person in his capacity as a shareholder to seek inspection under section 163.

Conclusion: The petitioner has locus standi; the petition under section 163 is maintainable in the capacity of a shareholder.

Issue (ii): Whether the Company Law Board may advise the Registrar of Companies to take action under section 629 in petitions under sections 163, 621 or 629.

Analysis: Sections 621 and 629 do not confer on the Company Law Board a power to give advisory directions to the Registrar of Companies to initiate prosecution. The statutory scheme separates adjudicatory functions of the Board from the Registrar's prosecution or complaint functions, and no provision authorises the Board to issue such advisory directions to the Registrar.

Conclusion: The Company Law Board does not have power or jurisdiction to advise the Registrar of Companies to take action under section 629.

Issue (iii): Whether the Company Law Board may advise the Registrar of Companies to initiate prosecution for contravention of section 163 upon finding that inspection was refused.

Analysis: Section 163 prescribes inspection rights and prescribes penalties and central government powers; it does not vest in the Company Law Board authority to direct or advise the Registrar to initiate prosecution proceedings. The Board's failure to decide the substantive petition and instead merely advising parties and the Registrar left the statutory application under section 163 undecided.

Conclusion: The Company Law Board lacked jurisdiction to advise the Registrar to initiate prosecution under section 163, and the petition under section 163 required substantive adjudication.

Final Conclusion: The appellate court allowed the appeal, set aside the Company Law Board's order because it neither decided the petition under section 163 nor had jurisdiction to advise the Registrar to prosecute, and remanded the matter to the Company Law Board for fresh consideration of the petition on its merits.

Ratio Decidendi: A shareholder retains statutory inspection rights under section 163 even if also a director, and the Company Law Board has no jurisdiction to advise the Registrar of Companies to initiate prosecution under sections 621/629 or section 163; where a tribunal fails to decide a statutory petition, the proper remedy is to set aside the order and remand for fresh adjudication.

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