Finality required for appeal under company law: a preliminary no-prima-facie order in an enquiry was not appealable.

An appeal under section 202 of the Indian Companies Act, 1913 lay only from an order that finally affected the rights and liabilities of the parties. A preliminary order under section 235, made at the enquiry stage and dropping proceedings against two directors for lack of a prima facie case while the enquiry continued against others, did not finally determine those directors' liability. As the determination remained interlocutory and could be revisited if fresh material emerged, it lacked the finality required for appellate review. The result was that such an order was not appealable under section 202 and the appeal was incompetent.

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Issues: Whether an order made at the preliminary stage of a proceeding under section 235 of the Indian Companies Act, 1913, dropping the enquiry against two directors for want of a prima facie case was appealable under section 202 of that Act.

Analysis: The appeal lay only from an order or decision that finally affected the rights and liabilities of the parties. A preliminary order holding that no prima facie case was made out against two directors, while the enquiry continued against others, did not finally determine the liability of those directors and remained open to reconsideration if fresh materials emerged. Such an interlocutory determination did not attain the finality required for an appeal under section 202.

Conclusion: The order was not appealable under section 202 of the Indian Companies Act, 1913, and the appeal was incompetent.

Ratio Decidendi: Under section 202 of the Indian Companies Act, 1913, only an order that finally affects the rights and liabilities of the parties is appealable; a preliminary, non-final order in a section 235 enquiry does not confer a right of appeal.

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