1965 (2) TMI 45 - HC - Companies Law

Appellant's Arguments Dismissed, Tribunal Upholds Order to Answer Inspector Questions

The court dismissed the appellant's arguments regarding the applicability of Article 20(3) of the Constitution, legitimacy of the inspector's questioning, ... Investigation of the affairs of a company Issues Involved:1. Applicability of Article 20(3) of the Constitution.2. Legitimacy of the inspector's questioning.3. Refusal to appear and answer questions.4. Alleged bias and principles of natural justice.5. Joint or several conduct of investigation by inspectors.Issue-wise Detailed Analysis:1. Applicability of Article 20(3) of the Constitution:The main question was whether the appellant was entitled to protection under Article 20(3) of the Constitution, which states that 'no person accused of any offence shall be compelled to be a witness against himself.' The appellant argued that the questions posed by the inspector were intended to incriminate him in a pending criminal case. However, the court noted that no specific questions were presented to demonstrate their incriminating nature. The court emphasized that the general and vague allegations made it impossible to conclude whether the questions had any connection with the prosecution. The court held that the Tribunal's order did not violate Article 20(3) as it did not specifically address any particular question's incriminating nature.2. Legitimacy of the Inspector's Questioning:The appellant contended that the inspector's questions aimed to establish a connection between Dalmia Jain Airways Limited and Dalmia Jain Aviation Limited (now Udyog Company) to prove misappropriation of funds. The court noted that the appellant had answered questions until he refused to continue, and there was no evidence of any specific question being objected to as incriminating. The court rejected the appellant's suggestion that the inspector should provide a list of questions in advance, stating that such a method would be impractical for conducting an investigation.3. Refusal to Appear and Answer Questions:The inspector certified the appellant's refusal to appear and answer questions, leading to the Tribunal ordering the appellant to comply. The court upheld the Tribunal's order, stating that the Tribunal had the jurisdiction to direct the appellant to answer questions put by the inspector. The court clarified that the Tribunal could not stop the investigation ordered by the Central Government under Section 235 of the Act.4. Alleged Bias and Principles of Natural Justice:The appellant argued that the inspector, being a legal adviser in the Company Law Administration, was biased. The court dismissed this argument, stating that government officials or agencies typically conduct investigations, and there was no principle of natural justice preventing such investigations.5. Joint or Several Conduct of Investigation by Inspectors:The appellant contended that both inspectors should have conducted the investigation jointly. The court rejected this argument, noting that the notification allowed the inspectors to act jointly or severally. The court explained that the provision enabled each inspector to carry out parts of the investigation independently, making the appellant's argument unsustainable.Conclusion:The court found all arguments presented by the appellant to be unsound and unsupported. The appeal was dismissed with costs, and the Tribunal's order requiring the appellant to answer the inspector's questions was upheld.