Self-incrimination and public examination: preliminary inquiry under section 45G does not trigger Article 20(3)

Article 20(3) protects against compelled self-incrimination only when a person is already an accused of an offence, so a preliminary public examination under section 45G does not attract that protection merely because answers may later be used adversely. The provision is described as operating at the stage of a prima facie inquiry into whether public examination should be ordered, without requiring a full trial at that stage. The phrase "acts or omissions" is read broadly to include management conduct causing loss to the banking company, not only fraudulent or criminal acts, and the proviso to section 45G(2) requires only an opportunity to show cause before such an order is made.

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Issues: (i) whether section 45G of the Banking Companies Act, 1949 violated Article 20(3) of the Constitution of India; (ii) whether the High Court correctly construed section 45G in directing the public examination of the appellants and in applying the proviso to sub-section (2).

Issue (i): whether section 45G of the Banking Companies Act, 1949 violated Article 20(3) of the Constitution of India

Analysis: Article 20(3) protects a person who is compelled to be a witness against himself only if he is an accused of an offence. A public examination under section 45G may compel answers and may, in a given case, operate against the person examined, but the statutory stage for ordering public examination is only a preliminary inquiry to determine whether a prima facie case exists. At that stage there is no accusation of an offence in existence. The possibility that an accusation may emerge after the examination does not bring the case within Article 20(3).

Conclusion: section 45G does not contravene Article 20(3) and is not unconstitutional on that ground.

Issue (ii): whether the High Court correctly construed section 45G in directing the public examination of the appellants and in applying the proviso to sub-section (2)

Analysis: The statutory scheme requires the Official Liquidator's report, a consideration by the High Court whether the reported acts or omissions have caused loss to the banking company, and then a prima facie decision whether public examination should be ordered. The proviso to section 45G(2) requires an opportunity to show cause, but not a full trial or a complete evidentiary inquiry at the preliminary stage. The expressions "acts or omissions" are not confined to fraudulent or criminal acts; they extend to conduct in the management of the banking company that has caused loss, including commercially unsound conduct. On the reports and objections before it, the High Court was entitled to conclude that a case for public examination was made out.

Conclusion: the High Court correctly construed section 45G and validly directed public examination of the appellants.

Final Conclusion: the appeals failed because the challenged statutory provision was upheld and the order directing public examination was sustained.

Ratio Decidendi: a statutory order for public examination made at a preliminary stage, before any person has been accused of an offence, does not attract Article 20(3); and "acts or omissions" in such a winding-up provision are to be read broadly to include any conduct causing loss to the company, subject to a prima facie judicial assessment.

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